Is Trump-related Media Shares Shifting Toward Previous Record Levels?
DT Media & Tech Group (DJT dropping by 2.54%) might soon become a popular investment choice following Donald Trump's recent election victory. With Trump expected to return to the White House next year, there could be an surge of enthusiasm surrounding DT Media's stock and all things Trump-related.
If there's a surge in activity on DT Media's social platform, Truth Social, and its new streaming service, Truth+, investors might witness improved performance from the company. Could this volatile stock revisit its earlier year highs?
Trading activity in DT Media is on the rise
Back in 2023, DT Media's stock was experiencing a growth spurt as election hopes appeared to be on the rise, while it was declining when the excitement seemed to subside. Since Trump's win, a fresh wave of optimism might set in, potentially extending this upward trend. The trading volume of DT Media stock has observed a marked increase in recent times.
The million-dollar question is whether this social media stock will follow the trajectory of cryptocurrencies, serving as a barometer for Trump's overall popularity (and potentially his presidential approval), or if its value will ultimately be dictated by the strength and success of its core business. If the former scenario plays out, the stock may hit the $79.38 high once again, but if the latter, that could prove less probable.
DT Media remains a dicey investment
On the day of the election, DT Media disclosed its latest quarterly results. The firm, which oversees Truth Social, reported revenues of approximately $1 million for the quarter ending Sept. 30, marking a 6% decrease from the previous year. This isn't exactly the growth trajectory you'd expect from a flourishing business.
Its operating loss climbed to $23.7 million, up from the meager $3 million recorded in the same period of the previous year. General and administrative expenses surged from $1.5 million in the previous quarter to $17.7 million this time around, owing to an increase in legal, software, accounting, and finance expenses for DT Media.
The release of these underwhelming figures might have been strategically timed, as DT Media wasn't the primary Trump-related news of the day. However, these figures are worth close examination, as they highlight the risk associated with investing in this enterprise. If DT Media's expenses continue to climb and they are unable to yield meaningful growth, it may prove challenging to envision the stock appreciating in value, based on its fundamental performance, or being hopeful about its growth potential in the future.
Should you invest in DT Media?
While DT Media may appear to be a stock poised to reap benefits from Trump's election win, this is by no means a guaranteed outcome. In the wake of the election, the stock saw a modest drop in value.
Predicting its future performance can be challenging. It's been acting more like a cryptocurrency and speculative buy this year than a traditional stock. The stock's $6.6 billion market cap is difficult to justify, considering its financial performance and growth potential.
DT Media may return to its highs, but if it does, it may not be due to strong business performance -- it'll likely be a result of speculation. That's why I wouldn't advocate investing in this stock, given its high risk and uncertain future.
Given the anticipation of Trump's return to the White House in 2023, investors might consider diverting their finance towards DT Media's stock, hoping for a surge in value. Conversely, if DT Media's financial performance does not improve, investing in money might not yield the desired returns, as the value of the stock could be heavily influenced by speculation rather than business growth.
