Trump Media & Technology (DJT) is a social media company whose majority shareholder is Donald Trump, the 45th and 47th president of the United States. It operates TruthSocial, a platform that mostly houses conservative content.
Trump Media also owns Truth+, a video-streaming company that is available on most devices like Roku, smartphones, and tablets.Â
Trump formed the company after he was booted from mainstream social media platforms like Twitter, Facebook, and YouTube. It then went public earlier this year by merging with Digital World Acquisition Corporation (DWAC) in a deal that valued it at over $4 billion.Â
Trump Media stock was trading at $30.47, while its HypeIndex gauge rose to 97%.
Positive hype
The DJT stock price jumped before and shortly after last week’s US election in which Donald Trump won big, He won 312 electoral college votes, beating Kamala Harris.Â
Republicans are also on track to win the House of Representatives and have already won the Senate. That has given Trump the substantial mandate he needs to govern.
This victory brought the Trump Media to the spotlight because it is mostly a meme stock. Unlike most companies, it has minimal sales and its number of users has dropped.
Analysts anticipate more sales for the company as organizations and governments seek to attract the attention of Donald Trump.Â
Another potential catalyst is that Trump could focus on using just TruthSocial for all government communications.
Data from SimilarWeb shows that the amount of traffic to the social media platform has jumped in the past few weeks.
Negative hype
Trump Media & Technology company has attracted substantial negative hype as the stock has dropped sharply after the election.
The company is severely overvalued since its market cap stands at over $7.2 billion. That is a big number for a company that has not much going on. For example, its valuation is almost similar to that of Twitter.
Trump Media, like other conservative media operations, will struggle to attract advertisers on its platform. Many large companies like Unilever and Procter & Gamble focus on mainstream media entities.
It is facing substantial competition from the likes of X, Gab, Rumble, and Mastodon.Â
TruthSocial has not attracted many users, with estimates showing that it had about 2 million monthly active users.Â
Trump could decide to sell the stock to deal with his legal woes and build his cash pile.Â
There is a risk that DJT will raise cash, diluting existing shareholders in the near term.
Trump Media’s short interest is rising, which is a sign that investors expect it to drop in the long term.
Summary on Trump Media stock
The daily chart shows that the Trump Media stock price peaked at $54.81 last week and has suffered a harsh reversal. This retreat happened as investors sold the Trump victory news and as rumours spread that he was considering selling shares.Â
Trump Media stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA), which is a positive sign. Therefore, a drop below the support at $24 will point to more downside, with the next point to watch being at $20. Since this is a meme stock, odds of a rebound cannot be ruled out.
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