Trump-related Media and Technology Shares Suffer a 11% Decline in November
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Hey there, folks! Let's dive into the ups and downs of Trump Media & Technology Group (TMTG) and its stock, DJT. The "Trump Trade" was in the spotlight last month, but TMTG seemingly missed the opportunity. The stock soared briefly following the election but then dropped like a stone, leaving investors scratching their heads.
TMTG, home to Truth Social, brings in almost no dollars in revenue. The stock was a symbol of Trump's campaign pre-election, but post-election, investors are unsure of its worth. The stock moved on rumors of talks to buy a cryptocurrency trading platform. The month ended with a 11% drop, according to data from S&P Global Market Intelligence.
Check out the chart below to see how TMTG rode a rollercoaster of emotions last month.
^SPX^ data by YCharts.
Trump Media Stumbles Post-Election
Most investors probably expected TMTG's stock to soar after the election, but that happened briefly. Shares jumped 6% on Nov. 6, but then plunged the next day, leaving little impact from Trump's White House win. They remained below their pre-election closing price for the majority of the month.
The other big news? TMTG is in talks to buy Bakkt, a publicly traded cryptocurrency trading platform majority-owned by Intercontinental Exchange. The Financial Times reported it as an all-stock deal, but valuation remains unclear, with Bakkt currently trading at a market cap of $155 million. This news aligns with Trump's recent embrace of crypto, and TMTG is also considering its own crypto payment service, per The New York Times.
What's Next for TMTG?
At this point, TMTG is a call option on the Trump name's power. Trump Media is launching a streaming service, but the crypto play is intriguing, leveraging the power of the Trump name and his followers. The company faces significant financial challenges and ongoing legal investigations, but there's potential if it can turn its stock into a real business.
Now, let's touch on some insights from TMTG's performance and plans.
Sales and Marketing Spending: TMTG upped its sales and marketing spending significantly in Q3 2024, with a surge to 2,189.4 thousand U.S. dollars, from a meager 333.6 thousand U.S. dollars in Q3 2023.
Cryptocurrency Involvement: The Trump family is dipping their toes into the crypto market, with initiatives like the launch of meme coins and support for businesses based on other blockchains like Bitcoin and Solana.
Regulatory Framework: President Trump issued an executive order to promote the digital asset industry and support the growth of blockchain technology. The order also established a working group on digital assets to propose a federal regulatory framework and establish a national digital asset stockpile.
SEC Task Force: The SEC launched a new crypto task force to develop a comprehensive regulatory framework for crypto assets, aiming for clear regulatory lines, realistic paths to registration, and sensible disclosure frameworks.
Investors should exercise caution but see potential in TMTG if it can turn its stock into a real business. As TMTG engages in crypto initiatives and regulatory frameworks evolve, it could be an exciting ride ahead. Keep your eyes on the news for updates!
Investors are closely watching TMTG's potential involvement in the cryptocurrency market, as the company is reportedly in talks to acquire Bakkt, a publicly traded cryptocurrency trading platform. This move could leverage the Trump name and its followers, potentially turning TMTG's stock into a profitable venture.
Given the recent surge in sales and marketing spending and President Trump's executive order promoting digital asset growth, investing in TMTG may offer the opportunity to capitalize on the evolving financial landscape, especially with the company's focus on meme coins and blockchain technologies like Bitcoin and Solana.
