Was the initial enthusiasm that DJT, the action of Trump Media & Technology Group, caused among traders and investors, just an ephemeral syndrome? The stock market action was supposed to ride on the success of Truth Social. Unfortunately, less than a month after its launch on March 26, the DJT has completely gone cold. Associated with the image of Donald Trump, would the action only depend on a possible legal victory for the ex-president?
DJT: stock market action reaches historic low in a few weeks
Having entered the stock market on the Nasdaq on March 26, the DJT stock of the company Trump Media & Technology Group promised to become a financial phenomenon. The week it entered the Nasdaq, its price reached $79.38, for a market capitalization varying between $8.9 and $11 billion.
However, according to experts like John Rekenthaler, “investing in Trump Media is a leap of faith,” because “investing in a company linked to a celebrity carries certain risks.” Indeed, as soon as the first criminal trial against Donald Trump opened in New York, the DJT reached its historic low of $22.25. Worse, almost all of the DJT securities in circulation, except those held by insiders, have currently already been resold.
Last Wednesday, the share price rose to $27.27, pushing its market capitalization from $3.2 billion to $3.7 billion. The cause ? The day before, the company Trump Media announced the creation of a video streaming platform. Unfortunately, the information only had a fleeting effect. At the close of trading, the DJT fell back to $26.60.
Trump Media's annual results reflected in DJT's stock price?
Like Elon Musk for Tesla, Donald Trump's image could have given DJT stock a big success. Unfortunately, the publication by the company Trump Media of its results for the years 2022 and 2023 really did not work in its favor.
Indeed, according to published regulatory filings, Trump Media recorded an operating loss of $16 million in 2023. Its interest expense is $39.4 million, or nearly 10 times its revenue. $4.1 million. The trend was the same in 2022. The evolution of the trial against the former American president is therefore not the only factor which affects the DJT.
Should we hope that a possible legal victory for Donald Trump, and possibly his election, will boost the stock price of DJT? In any case, as experts say, investing in DJT is a real leap of faith.
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