New York CNN —
Former President Donald Trump’s social media company suffered a sudden selloff in the stock market on Tuesday, suspending trading and leaving traders scratching their heads.
Trump Media & Technology Group, owner of Truth Social, had soared at about $31 a share during choppy trading, but the company took heavy trading volume shortly after 2:40 p.m. ET. It soon fell below $29.
Nasdaq suspended trading on Trump Media for five minutes at 2:42 p.m. ET, a routine cooling period that exchanges are required to impose during times of high volatility.
Once trading resumed, Trump Media initially rallied, but has since fallen back below $27.
Social media platform owner Truth Social ended the day down 10% and 20% below the day’s high.
There appear to be no new developments or announcements to explain this sudden plunge. But Trump Media is a notoriously volatile stock.
Matthew Tuttle, CEO of Tuttle Capital Management, told CNN that he believes the sharp decline was due to technical factors. He said that when Trump Media’s stock price failed to break above its 200-day moving average, which is closely watched as a technical level, traders took a “reversal” and bet against the stock.
By Tuesday afternoon, the Trump media was under fire.
The stock more than doubled in value in three weeks, a surprising move driven by polls and betting odds suggesting which way the White House race could go. .
“With this type of movement, the bottom can break out pretty quickly,” Tuttle said in an email.
Jay Ritter, a professor at the University of Florida, said Tuesday’s trading volume in Trump Media stock was “huge.”
“In meme stocks, where a lot of the holders are on a short-term momentum strategy, when the tide turns, everyone wants to go in the same direction,” Ritter said, adding that Trump Media is no match for GameStop or AMC. It was described as a meme stock similar to .
Ritter said it’s “rare” for a multibillion-dollar company to plummet like this without any news, but meme stocks are driven by momentum, not fundamentals, so he doesn’t want to make a sudden move. He said there is a possibility.
At Tuesday’s peak, Trump’s 114.75 million shares in the company were worth $3.88 billion on paper. However, by the end of the day, the value of that stock had fallen to $3.1 billion.
This is the second recent trading suspension for Trump Media. President Trump last month slammed Nasdaq for its routine actions and threatened to move its listing to the New York Stock Exchange.
Trump Media shares rose 2% in after-hours trading.
