President-elect Donald Trump’s social media stock experienced fluctuations this week, with a notable surge followed by a decline and subsequent recovery. After a post-election-victory surge, Trump Media and Technology Group saw a 42% decrease in shares from their recent peak. This decline was attributed to a common trading strategy known as 'buy the rumor and sell the news,' where traders anticipate positive events for a company and sell once those events occur.
However, a significant turnaround came when Trump made a post on Truth Social addressing rumors about selling shares of Truth Media. In his post, Trump clarified that the rumors were false and stated that he had no intention of selling his shares. This declaration led to a surge in the stock price, with shares rising nearly 15% on Friday.
As the company's largest shareholder, Trump's 114.75 million shares are now valued at approximately $3.7 billion, up from $3.2 billion at the market open on Friday. Despite the fluctuations throughout the week, the stock managed to end the week with a 4.4% increase.
Trump's social media presence and market influence were evident in the rapid response of traders to his Truth Social post. The episode highlights the impact of social media communication on stock performance and investor sentiment.
