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Is Trump Media & Technology Group Corp (DJT) Stock Bottoming Out?

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

Among the most significant developments this week, Trump Media & Technology Group Corp. experienced a negative market reaction following concerns over various reports surrounding the company. Additionally, the latest quarterly update disappointed investors, contributing to a broader sell-off. As a result, on Friday, Trump Media & Technology Group Corp.’s stocks have been trading down by -7.97 percent.

  • The stock fell by 15% in pre-market trading, marking a significant decline on Sep 11, 2024.
  • DJT fell by 13.6% in premarket activity, reversing a 3.3% increase from the previous session on Sep 11, 2024.

Candlestick Chart

Live Update at 15:04:25 EST: On Friday, September 20, 2024 Trump Media & Technology Group Corp. stock [NASDAQ: DJT] is trending down by -7.97%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

A Quick Overview of Trump Media & Technology Group Corp.’s Financial Standing

The steep decline of DJT’s stock brings us to a deeper inspection into their financial health. With recent data shedding more light, things don’t look too rosy. Imagine standing on a shaky bridge, just needing a gust to spiral downwards; this describes DJT based on their latest earnings.

Financial Statements:

  • Revenues: Did not see a clear figure displayed, but their total revenue stood at $836.9K for Q2 2024. This is quite tiny compared to their colossal ambitions. In terms of revenue per share, they didn’t report any specific figures which adds to the vagueness.
  • Net Income: DJT reported a net loss of $16.37M. Already the alarms should be blaring. This is against an operating income of $836.9K.
  • Expenses: With total expenses standing at $19.49M, it’s obvious that their spending far outweighs their earnings.
  • Shares Outstanding: 194.7M shares give them a substantial market presence, but the loss stands proportionately large.

The company reported a negative EPS of $-0.1. Although EPS isn’t the sole indicator, a negative figure is never comforting for investors.

Key Ratios:

  1. Profitability Ratios:
  2. EBIT Margin: -22,341.6 (alarms are seriously ringing here)

  3. Profit Margin: -23,498.31 (almost feels like free-falling without a parachute)

  4. Financial Strength:

  5. Current Ratio: 24.7 (strong liquidity, but are they just sitting on cash?)

  6. Quick Ratio: 24.1 (again, lots of cash but usage efficiency is questionable)

  7. Management Effectiveness:

  8. Return on Assets (ROA): -40.84% (it’s not good by any measure)

  9. Return on Equity (ROE): -68.1% (they’re bleeding shareholders’ equity like it’s water)

  10. Valuation Ratios:

  11. Price-to-Sales: 1068.59 (massively overvalued given how small their actual sales are)
  12. Price-to-Book: 8.38 (again, p/b ratio is not looking appetizing considering their losses and debt figures)

To make a metaphor of DJT, imagine a huge ship with a tiny sail and ever-increasing leaks, just hoping for favorable winds. That’s DJT trying to keep afloat in a stormy market.

What Recent News Means for DJT

Breaking down the recent news headlines and their repercussions on DJT’s stock takes center stage in our narrative.

Significant Decline in Stock Price:

The mention of a 15% drop in pre-market trading is quite the jolt. When DJT lost 15% amid fears and uncertainties, it’s akin to a once roaring engine sputtering to a halt. The market reacts, typically, due to sentiments affecting immediate future expectations.

Further Dip of 13.6%:

Following a 3.3% rise, DJT dived by 13.6% in premarket trading holds significance. It’s almost a see-saw effect where investors’ fears outweigh their optimism. It’s like a quick rise in heartbeat, immediately followed by a sudden plunge, quick to scare away fitness enthusiasts.

Intraday and Multi-day Chart Insights

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Look closer at DJT’s trading patterns from recent intraday charts:

  1. High Volatility: Prices opened at $14 on Sep 20, 2024, fluctuating around $13.5 to $14.7 by the close. The frenzied up-and-down movements signify uncertainty among traders.

  2. Consistent Decline: Over several days from Sep 16-20, the stock moved from highs of $18.45 down to $13.5. It’s like watching a slow leak drain out a valuable substance, and investors are paying the price.

  3. Open-Close Patterns: With daily openings suggesting optimism but closing lower, it’s clear investor trust is dwindling.

The tale from these charts speaks loud and clear; it’s a warzone with hesitation written all over it. Despite a strong opening showing potential, weak closing prices saps away confidence.

Understanding the Financial Health Through Reports

Let’s unfold the financial statements in simpler terms.

Income Statement:
– An EBITDA loss of $16.52M in Q2, indicating their earnings before interest, taxes, depreciation, and amortization are deeply negative.
– Selling and marketing expenses of $1.175M. They’re spending but, where’s the return?

Balance Sheet:
– With assets reported at about $356.5M and equity at $341.7M, it’s impressive yet not enough to cover their mounting losses.
– Cash reserves show strength, with $343.95M available. Yet, excessive debt at $148.3M could offset any advantages quickly.

The broader picture portrays an organization with liquidity but battling deep-rooted profitability and efficiency concerns. It’s like a dam holding back waters but the cracks are appearing faster than they can be sealed.

Summary: Financial Journal Takeaways

As we peer through the lens of recent events and financial standings, the situation for DJT appears grim. With massive declines recently, doubts cloud their ability to stabilize.

Key Considerations:

  • Stock Decline: Double-digit percentage drops signify more than discomfort; they radiate lost confidence.
  • Financial Health: With substantial cash but equally staggering losses, the fundamentals need substantial changes.
  • Market Sentiment: Investors seem to be losing faith, evident in the stock’s erratic, downward moves.

In this unfolding saga of DJT, the taking is perilous; much depends on immediate, pivotal interventions to mend financial leaks. The question remains, can they not only weather the storm but come out unscathed? Here’s to closely watching follow-up news and movements.

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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”