After the dust settles from the usa presidential election, the Trump Media Technology Group faces the risk of extreme fluctuations, as its trades are out of sync with its daily business fundamentals.
$Trump Media & Technology (DJT.US)$ The rollercoaster-like stock performance to some extent reflects the possibility of the Republican presidential candidate Trump winning. However, after the dust settles on the U.S. presidential election, the stock faces the risk of extreme volatility, as its trading is largely disconnected from the daily business fundamentals. Data shows that Trump Media Technology Group had a revenue of 0.837 million USD in the second quarter, with a loss of 16.4 million USD, while the company's market cap is as high as 6 billion USD.
Former Senior Vice President of Lehman Brothers Brian Lukow stated: "(Trump Media Technology Group) This stock is wildly overvalued and makes no economic sense, even if Trump is elected President of the United States." He believes that if Democratic candidate Harris wins, the Trump Media Technology Group will be the best target for short selling.
The Trump Media Technology Group has fervent followers online, including self-proclaimed Trump supporters who vow to hold the stock long term. A trader who prefers to remain anonymous stated that he holds the stock because he believes the company has a great opportunity for media mergers, and if Trump wins the presidential election, the stock price may rise further. Others see this stock as a good short-term trading opportunity.
As the election approaches, the stock price of the Trump Media Technology Group has experienced significant fluctuations. Due to the sharp fluctuations, the stock halted trading five times last Friday; in the previous week, the stock fell more than 21%.
Analysis firm S3 Partners points out that if Trump wins, there could be a risk of short squeeze for the Trump Media Technology Group stock. In addition, the stock options of the Trump Media Technology Group have attracted significant trading volume in recent days. According to data from option analysis service Trade Alert, an average of about 0.3 million contracts of the stock options were traded daily in the past month, with a total option premium of about 2.45 billion USD.
Traders expect that the stock price of the Trump Media Technology Group will experience significant fluctuations in the coming days. Option pricing indicates that by November 8, the stock price of the Trump Media Technology Group will fluctuate by around 50%.
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