- The DJT stock price has collapsed, leading to billions of dollars in losses.
- The company is attempting to spin off the Truth Social platform into a separate publicly traded company.
- Technical analysis and fundamentals point to more weakness, potentially to $5.
The DJT stock price has crashed hard, leading to billions of dollars in losses as the market capitalization moved from over $9 billion to $2.75 billion. This retreat may continue in the foreseeable future as President Donald Trump’s approval rating slumps and the fundamentals of the economy deteriorate.
Trump Media is Facing Major Headwinds
The DJT stock price has plunged over the past few years as its business conditions have deteriorated. This performance continued last week as Devin Nunes resigned as the Chief Executive Officer (CEO).
The most recent results showed that the company is not making money, as large advertisers have largely kept away from the platform. Its recent results showed it made just $2.6 million over the past nine months of the year and $972k in the last quarter.
Trump Media suffered a big loss of over $54 million in the quarter and $106 million in the first nine months of the year. The management has justified the losses as being necessary to fund its research and development (R&D).
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There are signs that Truth Social has not become a popular social media platform despite Donald Trump being the president.
Data compiled by SimilarWeb shows that its website visitors are just 22 million per month, far lower than those of other popular social media platforms. These numbers have likely peaked as Donald Trump’s popularity continues to wane, with his approval rating being in a freefall.
This likely explains why the company is planning to spin off Truth Social into a new, publicly traded company following the merger with TAE, a nuclear energy company.
The management justified the decision noting that it will help to create distinct companies that will boost shareholder value.
Still, on the positive side, the company has a clean balance sheet, with 9,542 Bitcoin valued at over $734 million. It ended the quarter with over $2.5 billion in financial assets and is making money from its options trading.
This cash, however, will be depleted by its significant losses and its investment in the nuclear fission business.
DJT Stock Price Technical Analysis
The daily chart shows that the DJT share price has been in a strong bearish trend in the past few months. It recently crashed below the important support level at $12.10, its lowest level in September last year.
The stock has remained below the 50-day and 100-day Exponential Moving Averages (EMAs), the Ichimoku Cloud, and the Supertrend indicators.
Therefore, the most likely scenario is where the stock continues its downtrend, potentially to the key support level at $5. A move above the $12 resistance will invalidate the bearish outlook.
Still, shorting a company like Trump Media is risky, as it may face a short squeeze, as we have seen with companies like Opendoor and Avis Budget recently.
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