Trump Media Stocks Mysteriously Plunge | CNN Business

Former President Donald Trump's social media company suffered a sudden shock to the stock market on Tuesday that briefly halted trading and left traders scratching their heads.

Truth Social owner Trump Media & Technology Group was trading sharply higher during a volatile session at around $31 per share when it quickly fell below $29 just after 2:40 pm ET on heavy trading volume.

Nasdaq halted trading for Trump media for five minutes at 2:42 p.m. ET, a routine cooling-off period imposed on exchanges during periods of heavy volatility.

When trading resumed, Trump Media initially bounced back before dropping below $27.

Owner of social media platform Truth Social ended the day down 10%, and 20% below its daily high.

There were no new developments or announcements that would explain the sudden plunge. But Trump Media is a notoriously volatile stock.

Matthew Tuttle, CEO of Tuttle Capital Management, told CNN he suspects the sell-off was due to technical reasons. He said that when Trump Media's share price failed to break through its 200-day moving average, a closely watched technical level, traders “flipped” to bet against it.

As of Tuesday afternoon, the Trump media was on fire.

The stock has more than doubled its value in a three-week span, a stunning move driven by polling and betting odds that suggest the race for the White House could go either way.

“Sometimes the bottom falls out very quickly with moves like this,” Tuttle said in an email.

University of Florida professor Jay Ritter noted that trading volume in Trump Media shares on Tuesday was “huge.”

“With meme stocks, where many holders are playing short-term momentum strategies, when the tide turns, everyone wants to move in the same direction,” Ritter said, describing Trump Media as a meme stock like GameStop and AMC.

Ritter said that while it is “rare” to see a multibillion-dollar company plunged in this way without any news, meme stocks suddenly move because they are driven by momentum, not fundamentals.

At Tuesday's peak, Trump's 114.75 million shares in the company were worth $3.88 billion on paper. But by the end of the day, those shares were worth $3.1 billion.

This is the second recent trading halt for Trump Media. Last month, Trump attacked Nasdaq over routine actions, threatening to move the listing to the New York Stock Exchange.

Shares of Trump Media rose 2% in after-hours trading.