Donald Trump is attracting a lot of attention on various social media platforms, but this may not have a positive impact on Trump Media’s stock.
Trump Media and Technology Group (DJT -7.28%) The stock experienced another round of major sell-offs in the last trading week. According to data from S&P Global Market Intelligence, the company’s share price ended the week down 14.5 percent.
Trump Media shares fell this week as the former president and current candidate continued to post messages on X, the platform formerly known as Twitter. By posting messages on X in addition to Truth Social, Trump may be taking away some of his company’s platform’s appeal.
Trump Media shares feel the X-factor
Donald Trump is in the midst of campaign season and is using the X platform to increase his media reach. On the other hand, he is also the largest shareholder in Trump Media & Technology. Viewing Truth Social as the platform that was the exclusive destination for most of his messages had given the platform an appeal, and investors fear that this is now diminishing.
Another complicating factor is that the company filed last week for registration of up to 5.1 million shares by some shareholders, and restrictions on insider sales will soon be lifted. Trump Media stock hit a new all-time low on Friday, ending the day’s session at $19.50 per share.
What’s next for Trump Media shares?
Despite its share price being near record lows, Trump Media still has a market capitalization of around $3.85 billion. It’s possible that positive news on the election or other developments could help push the company’s share price significantly above current levels, but investors should be aware that the company’s prospects are highly speculative at this point.
Trump Media Company posted a net loss of $16.4 million in the second quarter, ending the period with about $344 million in cash and equivalents and no debt. Meanwhile, about half of the company’s net loss last quarter came from legal costs, including costs related to completing the SPAC merger. The company’s second-quarter loss actually looks quite small compared to its overall valuation, but it also raises some questions.
Trump Media is still in the relatively early stages of expanding its business, reporting revenue of just $828,000 in the second quarter. It’s likely the company will need to significantly increase its spending to achieve substantial revenue growth, and it’s not clear how it plans to successfully monetize Truth Social and its new streaming platform.
Keith Noonan does not own any stocks mentioned. The Motley Fool does not own any stocks mentioned. The Motley Fool has a disclosure policy.
