Trump Media rallies as polls show election in dead heat

The surge in interest comes as Trump Media’s business performance remains lackluster

Shares in Donald Trump’s social media company extended a five-week rally that’s added more than $7.9 billion in value to a company some expect will benefit sharply if the former president wins next week’s election.

Trump Media & Technology Group Corp. rose 8.8 percent Tuesday, pushing its five-week rally to 324 percent. That’s ballooned Trump’s paper gain in the company to nearly $6 billion.

The firm, which owns the X-lookalike social media platform Truth Social, has at times traded like a proxy for sentiment of Trump’s perceived chances of winning the US presidential election on November 5.

Some corners of the market have increasingly placed wagers on a Trump victory, pointing to betting market sites where gamblers give him a two-to-one chance despite national polling averages showing a virtual dead heat between Trump and Democrat Kamala Harris.

Trading volume in Trump Media has soared in recent days, and spiked higher Tuesday as about 165 million shares changed hands, more than four-times what’s been seen on average over the past month.

The surge in interest comes as Trump Media’s business performance remains lackluster. The company’s $10.3 billion market capitalization is larger than the valuation Fidelity ascribed to its stake in Elon Musk’s X last month. The disclosure showed its position was worth about $4.2 million, making the company worth about $9.4 billion on paper when using its position.

“The line between gambling and trading has become increasingly blurred,” said Steve Sosnick, chief strategist at Interactive Brokers, referring to the broader moves across a group of stocks favored by retail traders who cater to the former president’s supporters.

The volatility also emerged in other companies loosely associated with Trump’s political fortunes. Among those companies was Peter Thiel-backed video network Rumble Inc., which swung between a 5.6 percent gain and an 8.5 percent drop Tuesday. Phunware Inc., a money-losing software company that designed the app for Trump’s 2020 campaign, fell more than 20 percent at one point before ending the day down 18 percent.

Bitcoin, another trade market watchers say is driven to some degree by Trump’s perceived chances, surged past $70,000 and is on the cusp of an all-time high.