Last week, Trump Media Stock saw a 13% increase following positive news about Donald Trump. However, this increase was overshadowed by three negative indicators. On Monday, there was a high volume reversal as the stock opened the week at $34, jumped to $54, then dropped to the mid-$40s in pre-market trading. During regular trading, the stock initially dropped to $41 but closed under $40-1/2, up over 30% from the previous close. In post-market trading, the stock dropped to $36, cutting the day’s gain to 16%.
The stock also failed to break through the interim barrier of $45, which had been set during an earlier selloff period. Throughout the rest of the week, the stock traded in a narrow range of $36-$38 and closed at $35 on Friday, failing to break through the major barrier of $35. These failures to break through key barriers indicate that the selloff is still intact.
Analysts believe that the value of Trump Media Stock may be inflated due to Donald Trump’s involvement, but this may not be enough to sustain the stock if the company’s operations do not provide fundamental support. With all lockups expiring on September 25, there is a risk of shareholders selling their shares, as many were issued in payment for services or debt payoffs. The upcoming second quarter earnings report in August will be crucial in determining the future of the stock, as shareholders and investors will be looking for progress in Truth Social and management’s growth strategies.
If the company’s results show positive growth and management presents an attractive outlook, fundamental support for the stock will be strengthened. However, if the earnings report disappoints and management fails to provide a compelling growth strategy, the selloff trend could continue. It is important for investors to pay close attention to the developments in Trump Media Stock and the company’s future plans to make informed decisions about their investments.
