No one knows why Trump Media shares are rising or falling

These explanations made no sense: previous public documents had already made it abundantly clear that Truth Social was a bad deal.

But this story established a useful pattern over the following weeks: Trump Media shares would fall again, and then the explainers would explain that there was a new reason for the fall. The company offered more shares for sale. Or else Trump’s secret trial for payment of the money had begun.

So how can we explain that over the past two weeks, Trump Media’s shares have doubled again? Or that after this rise, stocks collapse again on Wednesday?

People get paid to explain this stuff, even if they don’t really know it, so they try: Maybe Trump’s criminal trial is good for Truth Social since it draws attention to the fact that Does he post a lot on it? Or maybe shares rose because of the company’s cynical campaign to blame the stock’s slide on evil stock manipulators who are shorting the stock — even though Trump Media’s actions are difficult and costly to sell short?

It’s really exhausting. This is why people are barely trying to explain the most recent collapse: CNBC notes that the company just revealed that Trump himself would get more Trump stock, but… eh. That doesn’t even count as a half-hearted explanation.

ALL RIGHT. My turn. Here’s why Trump stocks are crashing, rallying, or crashing again: There is no underlying reason.

By any objective measure, Trump Media is barely a business and would at best be worth only a tiny fraction of the billions the market prices for it each day. But Trump Media is a meme stock, and as such it can swing wildly based on…vibes? Or mojo? Or, in some cases, the misplaced trust that some of its retail investors have in Donald Trump, the person?

We know that in the long run, meme stocks seem to dememeify and their frothy actions end up reflecting something closer to reality. (See, for example, the multi-year performance of pandemic favorites like GameStop, Bed Bath and Beyond and AMC.)

But in the short term, on any day, it will be very difficult to find a rational reason for their market movements. It’s like Jon Stewart is trying to explain how the Knicks missed Game 5 against the Sixers.

So go ahead and bet on or against Trump Media – any day you could be right? But don’t kid yourself into thinking you’re doing anything other than putting your money on a roulette wheel.