CNN
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Shortly before the election, former President Donald Trump's social media stocks are plummeting, putting a significant dent in his fortune.

After an absurd surge over the past five weeks that was based entirely on Trump's perceived re-election prospects – and had nothing to do with the company's actual business – Trump's social media stock has plummeted. It has now lost about 41% of its value in just three days.

Truth Social owner Trump Media & Technology Group's stock price plunged another 14% on Friday after plunging 12% on Thursday and 22% on Wednesday – Trump Media's worst one-day loss since going public in March .

After the closing bell on Tuesday, the stock price was $51, valuing Trump's dominant stake in the company at about $5.9 billion. On Friday, the value of Trump shares plummeted to $3.5 billion. That means Trump has lost $2.4 billion in net worth since Tuesday.

Trump Media shares, trading under the ticker symbol “DJT,” have become an indicator of how traders expect the outcome of the presidential election. In recent days, prediction markets have become more confident that Vice President Kamala Harris will win the election, even though the polls clearly indicate that the election is a failure and there is no clear favorite.

“Meme stocks, which include DJT, are very vulnerable to momentum shifts,” said Steve Sosnick, chief strategist at Interactive Brokers, who noted a significant “sentiment shift” in prediction markets in recent days. “The surge in prediction markets last week was a boon for DJT; Conversely, a move away would harm the stock.”

The company's fundamentals have nothing to do with why the stock is trading. Trump Media did not release any major news that would explain the crash.

“Remember that stocks are essentially a binary, leveraged election bet,” Sosnick said. “If it wins, there are good reasons for it to increase in value. If he loses, the company will go back to being a barely profitable business with little revenue.”

Trump Media stock has been exceptionally volatile throughout the year. But between September 23 and the closing bell on Tuesday, Trump Media's value had quadrupled.

The huge gains pushed Trump Media's value to $10.3 billion as of Tuesday's close. That means it was briefly worth more than the implied value of X, Elon Musk's social network formerly known as Twitter.

This is despite the fact that X has about 70 million monthly active U.S. users on iOS and Android, according to Similarweb data shared with CNN. That's roughly 100 times Truth Social's 698,000 monthly active U.S. users.

Even Threads, Meta's relatively new X-competitor, has about 20 times Truth Social's user base, according to Similarweb.

Trump Media's fundamentals remain very modest for a company still valued at about $6 billion. By comparison, CBS owner Paramount Global, a company whose market value was recently surpassed by Trump Media, has generated more than $14 billion in revenue so far this year.

But Trump Media only generated $1.6 million in revenue this year.

George Kailas, CEO of Prospero.ai, a research platform that helps traders gather market information, told CNN on Friday that he wasn't surprised by the sudden shift in momentum at Trump Media because that's exactly what's happening with meme stocks.

“It’s like a game of musical chairs. Everyone is happy when the music plays and the stock goes up,” Kailas said. “But since it’s not based on any good tangible value, the moment it stops, everyone panics… and the ground collapses.”