new York
CNN
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Former President Donald Trump’s social media company is booming on Election Day as it faces a watershed moment that will be decided by voters.

Shares of Truth Social’s owner, Trump Media & Technology Group, soared 13% Tuesday morning.

The rally is based on a gain of 12% Monday and represents a rebound compared to three days of heavy losses last week.

Traders have been betting for months that a Trump victory could increase Truth Social’s value – although justifying its current price would be very difficult, even if Trump were back in the White House.

Trump Media is losing money and generating very little revenue. Its main product, the conservative social network Truth Social, remains tiny. Yet Trump Media has transformed into a multibillion-dollar meme stock and a favored way for traders to bet on how this election cliffhanger will end, thereby inflating prices. net worth of its largest shareholder along the way.

Some other elements of the so-called Trump Trade also rose on Tuesday. Big bank stocks and bitcoin have rallied. The same was true for private prison companies Geo Group and CoreCivic. Prediction Markets have also moved in Trump’s direction.

However, the latest polls and the main electoral models suggest that the race for the White House is a real toss-up that could go either way.

Matthew Tuttle, CEO of Tuttle Capital Management, told CNN on Tuesday that it was far too early to draw conclusions from Trump’s media outburst and other market movements.

“It’s extremely early. I don’t think we’re seeing smart money here. We see people throwing darts on a board,” Tuttle said.

Trump Media, which trades under the ticker symbol “DJT,” has a lot at stake.

Even though Trump Media only generated $1.6 million in revenue this year, its revenue is valued at nearly $8 billion based on Tuesday’s earnings. That means Trump Media’s market value is roughly equal to that of Paramount Global, a media conglomerate that owns CBS and has grossed more than $14 billion this year.

If Trump loses the election, Trump Media won’t have much to fall back on. Venture capitalist Gene Munster recently told CNN that a Trump loss could drop the value of Trump Media to as little as $1 billion. Others think it could be worth even less.

“I wouldn’t touch DJT because I think the downside is zero, and I’m not sure how big the upside is,” Tuttle said.

Trump owns 114.75 million shares of the company, making him the dominant shareholder. At current prices, these shares are worth about $4.5 billion. That’s a big increase from $1.4 billion on September 23, when Trump Media closed at a record high.