DJT stock is rallying ahead of the election. Here’s why.

Since plunging to record lows last month, Trump Media & Technology Group stock is booming.

Shares of former President Donald Trump’s social media company surged more than 20% to $47.36 Monday, its highest level since June.

Trump Media’s comeback has added billions in paper wealth for Trump, who owns nearly 57% of the company. His stake is now worth over $5 billion.

The stock’s upswing in the final days before the election is a sure sign of one thing: Investors are betting on Trump retaking the White House. 

Polls indicate the race is deadlocked, but “the perception is that he is now winning,” Tuttle Capital Management CEO Matthew Tuttle told USA TODAY earlier this month.

The other driving force? The stock is rife with short-term speculators. 

Monday’s stock surge came not when there was a material increase in Trump’s odds of winning the election but after Trump’s six-hour rally in New York City’s Madison Square Garden, which drew thousands of his supporters in red MAGA hats.

“DJT continues to be exceptionally volatile on a daily basis because there are speculators playing short-term momentum strategies. They buy when the price rises, pushing up the price even more,” said University of Florida finance professor Jay Ritter.

Meme stocks like Trump Media thrive on attention, Ritter said. 

“Today’s rally was driven by this attention, and then multiplied by momentum traders,” he said. “The higher the price goes, however, the greater is its downside potential. This stock is incredibly risky.”

Trump Media does not trade on business fundamentals. It’s a small player in the world of social media, it’s losing money and it has nearly no revenue. 

In August, it disclosed a net loss of $16.4 million on revenue of just under $837,000. The company has also been dogged by litigation and reports of management turmoil.

Its major draw is Trump. Trump Media would become more valuable if the next president is the majority shareholder as the flagship product, Truth Social, is the GOP presidential nominee’s bullhorn of choice. 

On the other hand, a loss to Vice President Kamala Harris could hammer the stock.

In regulatory filings, Trump Media, which trades under the vanity ticker DJT, has telegraphed how critical Trump is to the company’s brand, warning that its value “may diminish” if Trump’s popularity falters.

“If he wins, they could do something with this company,” Tuttle said of Trump. “If he loses I don’t see any way it stays afloat.”