trump media (DJT 14.03%) The stock is again posting strong gains in trading on Tuesday. The company’s stock price was up 19.6% as of 2pm ET and is now up 33.5% from last week.
Trump Media stock continues to have bullish momentum tesla CEO Elon Musk attended President Donald Trump’s campaign rally over the weekend. Shares of social media companies may also be rising thanks to buying by meme stock investors and short squeeze momentum.
Trump Media Benefits from Meme Stock’s Elevated Status
Elon Musk’s campaign rally in Butler, Pennsylvania over the weekend appears to have given the Trump media meme stock a boost. Musk has previously been influential in promoting meme-based crypto rallies. dogecoin and Shiba Inuand the Tesla and X CEO’s support for Donald Trump appears to be leading to a big rally in Trump Media stock.
Trump Media stock may also be benefiting from a moderate amount of short interest, given the company’s recent rise in its stock price. Short interest on the stock is not particularly high, but some short sellers may be cutting their losses by buying back shares after making explosive profits. This could cause the company’s stock price to rise further.
What’s Next for Trump Media Stock?
Despite the recent bullish momentum, Trump Media’s stock price is still down about 67% from the high it reached shortly after it went public through a merger with a special acquisition company (SPAC) earlier this year. The company has recently received increasing attention from meme stock investors, and its stock price may continue to rise significantly in the short term. For better or worse, developments in the presidential election are also likely to have a significant impact on stock price performance in the short term.
Regarding long-term catalysts, the situation is less clear. Trump Media has made the Truth social media platform a core part of its business, but the service appears to attract relatively low levels of engagement and doesn’t generate much revenue. For the second quarter, Trump Media reported revenue of just $828,000 and a net loss of $16.4 million.
For companies launching and expanding social media and streaming services, the losses actually seem very small. If you want to establish a lasting position in the highly competitive technology and media fields, you will likely need to significantly increase your spending.
Keith Noonan has no position in any stocks mentioned. The Motley Fool has a position in and recommends Tesla. The Motley Fool has a disclosure policy.
