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Is It Too Late to Buy Trump Media & Technology Group Corp. Stock?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

Significant developments surrounding Trump Media & Technology Group Corp. continue to influence its market performance. Among the most impactful news is rising scrutiny and legal challenges that could affect the company’s strategic initiatives and investor confidence. As a result, on Thursday, Trump Media & Technology Group Corp.’s stocks have been trading down by -7.87 percent.

Key News Impact:

  • In pre-market trading, DJT stock fell by 15%, causing a significant drop.
  • The company’s stock also saw a 13.6% decline in pre-market activity, reversing a 3.3% increase from the previous session.

Candlestick Chart

Live Update at 17:31:01 EST: On Thursday, September 19, 2024 Trump Media & Technology Group Corp. stock [NASDAQ: DJT] is trending down by -7.87%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Overview of Trump Media & Technology Group Corp.’s Recent Earnings Report and Key Financial Metrics

Looking at the recent earnings report from Trump Media & Technology Group Corp., it’s clear things haven’t been rosy. The company reported a net income loss of $16.37M and a total revenue of about $836,900 for the recent quarter ending on Jun 30, 2024. This company’s finances also show significant issues in profitability and management effectiveness.

With a gross profit of $800,700 and EBITDA in the red at -$16.52M, DJT isn’t sailing on calm waters. The company’s cost of revenue is minimal at $36,200, but that doesn’t offset the heavy operating expenses of $19.5M. One of the more alarming figures is the net cash outflow from operating activities at -$21.43M, signaling that they’re burning through cash rapidly without generating equivalent inbound cash.

Financial ratios paint a troubling picture: a gross margin of 88.8% suggests minimal production costs, but this is shadowed by an abyss of negative net margins approaching -22.76K%. Additionally, the return on assets sitting at -110.24% indicates the company’s assets are generating significant losses, not gains.

What might be even more concerning are the leverage ratios. While the total debt to equity ratio is zero, which might be a positive in other scenarios, DJT’s current ratio of 24.7 and quick ratio of 24.1 (extremely high) suggest a liquidity trap. This indicates that while they can cover short-term debts easily with liquid assets, there are no long-term growth prospects. The enterprise value sits at roughly $2.8B, far outweighing their actual operational cash flows.

The stock’s market performance has also been on a roller-coaster ride over the past days. From a close of $23 on Aug 29, 2024, the movement has been significantly downward, bottoming out at $14.7 on Sep 19, 2024. Notably, key trading days saw huge fluctuations like the 18% drop from Sep 9 to Sep 10 and then further declines. The intraday data also show a lot of action but predominantly in a steep dive.

More Breaking News

Market Implications:

This tarnished financial health seems interlinked with troubling news and market sentiment. Investors have found little reason for optimism as the stock price continues to reflect negative earnings and bleak financial ratios. Amid these challenging market circumstances, what’s kept afloat is the discussion on future possibilities, albeit dimly lit ones.

Evolving Market Scenarios and Impact:

Walking Through the Financial Labyrinth:

Imagine walking through a dark maze where every turn seems tighter and harder to navigate. That maze is what DJT’s financial situation looks like. The company’s recent earnings report is like opening the Pandora’s box – showcasing revenue that’s barely scratching the surface and expenses that loom like unsolvable riddles.

With operating income at a shocking -$18.65M and basic EPS at -0.1, investors might feel they’re in a sinking ship. If your vessel is leaking, swift action or things of great value (like the reported whopping $938M influx from financing activities) might plug gaps temporarily, but the underlying structure remains flawed. For instance, despite a high cash position at about $344M, the free cash flow remains disturbingly negative, around -$23.58M. Trends like these can make even seasoned investors wary, almost like trying to light a candle in a windstorm.

Short-Term Gains, Long-Term Uncertainty:

Some might argue there are short-term plays to exploit DJT’s high liquidity ratios. But such trades would be like skating on thin ice. Yes, you might glide for a while, but any cracking sound should remind you of the risks beneath. The 15% and then 13.6% drops in stock price are telltale signs – these aren’t random occurrences but systemic issues coming to light.

History should serve as a cautionary tale. Those who were riding high on the roller-coaster two weeks ago saw the enormous leap to $23 only for it to tumble. Day-traders might pick up on the tiniest flickers of upticks, but in the grand theatre of the market, DJT’s recent performances do not make a compelling protagonist.

Envisaging the Future:

From an outsider’s viewpoint, it’s tempting to view DJT like an old ship in a storm – creaky, struggling, and perhaps past its prime. Yet, mysterious currents could too play a role. With financial indicators consistently in the negative and stock prices exhibiting a nosedive, the path towards any sustainable recovery looks like an arduous climb, one fraught with cliffs and loose rocks.

Conclusion: What’s on the Horizon

Navigating the turbulent waters of Trump Media & Technology Group Corp. requires more than just hope; it demands foresight, prudence, and perhaps a touch of audacity. The financials paint a picture of complexity and risk, while the stock price movements echo the ailing trust among investors. While speculative short-term gains might lure the brave, the storm clouds over DJT signal a pressing need to tread carefully.

Exploring safer harbors and keeping a keen eye on the changing tides will serve investors better. Keep your compass steady and navigate with caution, for the seas ahead are choppy. The winds of change for DJT may either course towards stabilization or stormier realms.

In essence, the query remains if now is an opportune moment to jump aboard or man the lifeboats. What will you choose? Patience and strategy, or the thrilling yet perilous venture into turbulent waters? Only time shall tell.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”