new York
CNN
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Former President Donald Trump's social media company suffered a sudden stock market crash on Tuesday, briefly halting trading and causing confusion among traders.

Truth Social owner Trump Media & Technology Group traded sharply higher at around $31 per share during a volatile session before quickly dipping below $29 shortly after 2:40 p.m. ET on heavy trading volume.

Nasdaq paused trading for Trump Media for five minutes at 2:42 p.m. ET, a routine cooling-off period that stock markets must observe during periods of intense volatility.

When trading resumed, Trump Media initially rallied before falling below $27.

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

There appeared to be no new developments or announcements to explain the sudden plunge. But Trump Media is a notoriously volatile stock.

Matthew Tuttle, CEO of Tuttle Capital Management, told CNN he suspects the selloff was due to technical factors. He said when Trump Media's stock price failed to break above its 200-day moving average, a closely watched technical level, traders “flip-flopped” and bet against it.

By Tuesday afternoon, Trump Media was on fire.

The stock had more than doubled in value in three weeks, a stunning move that comes as polls and betting odds suggest the race for the White House could go either way.

“Sometimes these types of measures fall apart pretty quickly,” Tuttle said in an email.

Jay Ritter, a professor at the University of Florida, noted that trading volume in Trump Media shares was “tremendous” on Tuesday.

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

Ritter said that while it's “rare” for a multibillion-dollar company to crash like this without any news, meme stocks are subject to sudden moves because they're driven by momentum, not fundamentals.

At its peak on Tuesday, Trump's holding of 114.75 million shares of the company was worth $3.88 billion on paper. But by the end of the day, the value of that stake had fallen to $3.1 billion.

This is the second trading halt for Trump Media in recent times. Last month, Trump criticized Nasdaq over the routine action and threatened to move the listing to the New York Stock Exchange.

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