Trumpmedia (NASDAQ: DJT) Shares are again posting big gains in Tuesday’s trading. The company’s stock price was up 19.6% as of 2:00 PM ET and is now up 33.5% over the past week.
Trump Media Stocks See Continued Bullish Momentum Following Tesla CEO Elon Musk’s appearance at a presidential campaign rally for Donald Trump this weekend. The social media company’s stock price could also gain ground, thanks to buying from meme stock investors and short-squeeze momentum.
Trump Media is benefiting from the rising status of meme stocks
Elon Musk’s campaign rally in Butler, PA over the weekend appears to have given Trump Media’s meme stock momentum. Musk has previously been influential in enabling meme-based gatherings for cryptocurrencies, among other things Dogecoin And Shiba Inuand it appears Tesla and X CEOs’ support for Donald Trump is now paying big dividends for Trump Media stock.
Following the company’s recent share price gains, Trump Media stock may also benefit from a moderate short squeeze. Although short interest in stocks is not particularly high, explosive profits can lead some short sellers to limit their losses by buying back shares. This, in turn, could boost the company’s stock price even further.
What’s next for Trump Media stock?
Even after a recent wave of bullish momentum, Trump Media stock is still down about 67% from the high it reached shortly after going public via a merger with a special purpose acquisition company (SPAC) earlier this year. With the company recently attracting more attention from meme stock investors, it’s possible the stock price could continue to make big upside moves in the near term. For better or worse, developments in the presidential race are also likely to have a significant impact on the stock’s near-term performance.
As for the long-term catalysts, the picture is less clear. Although Trump Media has made its Truth Social media platform the center of its operations, the service appears to be attracting relatively little engagement and not generating much revenue. In the second quarter, Trump Media reported revenue of just $828,000 and a net loss of $16.4 million.
For a company that launches and scales social media and streaming services, the losses actually seem quite small. Chances are the company will have to significantly increase its spending if it wants to gain a lasting place in the highly competitive technology and media categories.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Tesla. The Motley Fool has a disclosure policy.
Why Trump Media Stock is Rising Again Today was originally published by The Motley Fool
