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Trump Media & Technology Group Faces Significant Stock Decline

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

Recent headlines are shaking up Trump Media & Technology Group Corp.’s market standing. News of an SEC investigation into its SPAC merger and reports of declining app engagement are key factors causing concern among investors. These developments have led the company’s stock to plunge by -9.45 percent on Monday.

Recent Developments Impact:

Candlestick Chart

Live Update at 16:01:33 EST: On Monday, September 23, 2024 Trump Media & Technology Group Corp. stock [NASDAQ: DJT] is trending down by -9.45%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • The company’s stock fell by 15% in pre-market trading, marking a significant decline.
  • Shares slumped 6.7% after the company’s lockup period expired, allowing insiders to sell stock.
  • The stock declined by 13.6% in premarket activity, reversing a previous 3.3% increase.
  • The company fell 3.4% recently, continuing its downward trend.
  • Both Trump Media & Technology Group and Intuitive Machines saw declines of 3.8% and 2.4% in premarket trading, showing a bearish sentiment.

Quick Overview of Trump Media & Technology Group Corp.’s Financials:

The stock for Trump Media & Technology has been on quite a rollercoaster this past week. Opening on 17 Sep, 2024, at $17 and closing at $16.14, it seemed like a minor drop. But the day’s volatility with highs of $17.0903 showed the investors’ concerns already mounting. The next days saw an even more steep decline, with closing prices dropping to $12.15 on 23 Sep, 2024, making clear that investor confidence was diving off the deep end.

So, what’s driving this sharp decline? First, let’s touch upon the key financial metrics and earnings report.

Financial Performance and Insights:

DJT’s recent earnings report elucidates some challenges. With total assets reported at $356.49M and long-term debt at $530.3K, the balance sheet seems to wobble. Cash reserves stand at $343.95M, evidently high, but against total liabilities of $148.25M, this alone isn’t comforting investors.

Their income statement reveals operating revenue at just $836.9K with total expenses soaring to $19.49M. The company posted a net loss of $16.368M for the quarter ending 30 Jun, 2024. A glaring red flag is their EBIT margin of -22,341.6% — yes, you read that right, hugely negative.

Looking deeper into the key ratios, we see:
* Return on assets (ROA) at -40.84% suggesting inefficient asset use.
* Return on equity (ROE) at -68.1%, meaning shareholders aren’t seeing much value creation.
* Current ratio at 24.7, indicates liquidity but could also suggest idle cash not deployed effectively.

These figures likely explain the belly flop in stock prices. Investors might be heading for the exit seeing these red numbers.

Trends and Market Sentiment:

Analyzing the news, it’s clear:
1. Lockup Expiry: The stock slumped 6.7% post-lockup, indicating insiders offloading shares, creating doubt in public investor minds.
2. Overall Market Bear Sentiment: The tech space, particularly for DJT, is seeing a bearish sentiment, aligning with its 3.4% recent fall.
3. Pre-market Activity: A sharp 15% pre-market drop adds to the nervousness, especially reversing a 3.3% prior session gain, which was short-lived.

Moreover, the stock price movement from 18:63 on 10 Sep to 12:15 on 23 Sep showcases this distinct fear and uncertainty gripping investor sentiment.

Potential Impact on Stock Behavior:

DJT’s financial health, combined with the adverse news affects its market perception. This relationship between negative financials and news often drags stock prices down further, exacerbating losses. Could this mean a potential bottom? Maybe, but high risk persists.

Investor Tip: It’s crucial to remember that in volatile markets, especially with drastic downfalls like DJT’s, it’s often smart to wait and watch or engage in short-term trades rather than making long-term bets, which can turn precarious. Investing in penny stocks is fraught with risks, and DJT’s current trajectory emphasizes this.

Summing up, the financial reports and news trends paint a bleak picture. DJT’s sharp declines, drawn from poor earnings, soaring expenses, and fresh market skeptics due to insider sell-off, position it in a precarious stance. Keeping an eye on next quarter earnings, investor sentiment, and overall market trends will be key to gauging DJT’s path ahead.

Conclusion:

Coming against the background of negative news and financial reports, it’s evident DJT faces imminent challenges. The steep stock declines, attributed to insider sales and poor financial performance, have shaken investor confidence. The future remains uncertain, and whilst the company might manage an upturn, for now, risks overshadow potential gains.

In the financial world, where numbers narrate the profound tale, DJT’s story is troubling. It reminds one to tread cautiously, armed with insights and preparedness for market turbulence.

In summary: Assess risks, stay informed, and be ready for market twists and turns.

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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”