Shares of Trump Media & Technology Group (TMTG), which is 57% owned by former U.S. President Donald Trump, surged by 17% on Monday, continuing a sharp recovery fueled by increased optimism about Trump's chances in the 2024 presidential election. The stock has seen a remarkable rally in recent weeks, driven by a combination of betting markets favoring Trump’s chances and recent media developments. Investors are treating Trump’s media company as a speculative play on his potential return to the White House. Here’s an in-depth analysis of the stock’s performance and the factors influencing its rapid gains.

Trump Media Soars on Betting Odds and Media Moves

Trump's Election Odds Boost Share Price: The recent surge in Trump Media’s shares has been directly linked to rising betting odds that Trump will win the 2024 presidential election. As of Monday, contracts on PredictIt platform priced a Trump victory at 53 cents, indicating increasing confidence in his potential return to power. In comparison, Vice President Kamala Harris’ odds stood at 49 cents, as reported by betting websites like Oddschecker, which now gives Trump a 55% chance of winning.

Kamala Harris Interview on Fox News: Another key factor that fueled Monday’s stock gains was the news that Kamala Harris agreed to be interviewed by Fox News on Wednesday. This interview, set to be conducted by the network’s Chief Political Anchor Bret Baier, has stirred anticipation around the ongoing election race, amplifying the media focus on the candidates. Investors are closely watching political moves and public appearances as they assess their potential impact on Trump Media’s valuation.

Stock Recovers from Recent Lows

Staggering 120% Rebound in Three Weeks: Until late September, Trump Media was in a dramatic decline, hitting a record low of $12.15 per share on September 23, marking an 82% drop from its highs. However, the company has staged an impressive comeback, gaining 120% in the last three weeks, with a 53% surge just last week. The stock’s rebound has been driven by a combination of election speculation and investor enthusiasm about Trump’s political prospects, which has reignited interest in the company.

Trump’s Role as the Company’s Face: As the dominant shareholder with 114.75 million shares, Trump’s personal stake in the company has increased significantly alongside the stock’s recent recovery. The value of his shares has surged by about $1.7 billion since September 23, bringing his total stake to over $3 billion. As Trump remains the most popular user on Truth Social, the platform owned by Trump Media, his influence over the company’s fortunes is undeniably strong.

A Speculative Bet Tied to Trump’s Political Fate

Trump Media’s Value Tied to Election Outcome: According to Matthew Tuttle, CEO of Tuttle Capital Management, Trump Media’s stock is essentially a binary bet tied directly to the 2024 election. “If Trump wins, this stock has the potential to do something. If he doesn’t, it probably goes to zero,” Tuttle explained. This sentiment is echoed by market strategists who view the company’s stock market valuation as highly speculative and disconnected from its core business performance.

Revenue Lagging Behind Valuation: Despite its current $6 billion market value, Trump Media’s revenue is a far cry from its valuation. Analysts estimate that its revenue is comparable to that of just two Starbucks locations, a stark contrast to the inflated stock price driven by political speculation. The company’s valuation soared to $10 billion during its initial public offering in March, fueled by enthusiasm from Trump supporters and investors banking on his potential re-election.

Trump Media’s Connection to Truth Social

Truth Social’s Role in the Media Landscape: Trump Media’s core business revolves around Truth Social, a social media platform designed as a conservative alternative to mainstream networks like Twitter and Facebook. With Trump as its most prominent user, the platform has served as his primary outlet for communication with supporters. However, despite its political significance, the company’s financial fundamentals remain weak, with no clear path to profitability.

Speculative Nature of the Stock: Trump Media’s rise and fall is closely linked to Trump’s political prospects, making it a highly speculative stock. Investors are effectively betting on the binary outcome of the upcoming presidential election, with any shifts in Trump’s odds having a profound impact on the stock’s performance. This speculative nature makes it a risky but potentially lucrative investment for those willing to gamble on Trump’s re-election bid.