Why is DJT stock down? 2 possible reasons why Trump Media shares are sinking after Donald Trump’s election win
One of the most volatile stocks of 2024 is undoubtedly Trump Media & Technology Group Corp. (Nasdaq: DJT). The president-elect’s media company, whose primary product is Donald Trump’s Truth Social social media platform, has been on an absolutely wild and unpredictable ride since it debuted on the stock market in March. Shortly after its debut, DJT shares hit all-time highs above $71 per share. But over the next eight months, DJT shares fluctuated wildly—usually based on Trump’s perceived popularity, his chances of winning the 2024 election, or due to truly historic events like the first assassination attempt on his life on July 13. Shares had fallen to as low as nearly $12 by September when the popularity of his opponent, Vice President Kamala Harris, was near all-time highs. But then Donald Trump had an unexpectedly quick and decisive election victory, declared in the early hours yesterday, and with that victory, DJT stock again shot up, soaring over 35% in premarket trading. Yet today, despite Trump’s clear victory, Trump Media shares are plunging. They are currently down as much as 15% in premarket trading to just over $30.50 per share. But why? These are two possible reasons. Profit-taking When any stock shoots up 35% in one day, there are going to be certain investors who want to take the win and limit any future losses. Even though these investors may like the stock and believe in the company and its future, they want to lock in their profits today. To do that, they have to sell. If enough investors engage in this kind of profit-taking, it can actually be what halts the stock’s continued rise. Other investors see profit takers selling and know that such selling can send the stock lower, so even more investors start selling their shares before their profits evaporate, too. Profit-taking that ends up sending a popular stock’s price lower is nothing unusual. You can see it a lot of times with some of the largest companies. For example, when Apple has a blowout quarter, many would expect the company’s shares to surge right after the earnings are announced. But what’s happened many times is Apple stock (Nasdaq: AAPL) actually drops after a blowout quarter. This is frequently attributed by many analysts to profit-taking—investors want to lock in their profits in case this is the company’s peak financial and share price position. So profit-taking is one possible reason DJT shares are plunging. But there is another. The perception that Trump Media doesn’t have strong fundamentals A big problem with Trump Media is that the company’s shares are widely seen to be a “belief stock”—a stock whose appeal is based more on the popularity of the individual associated with the company than on any sound financial fundamentals. Trump Media’s astonishing 35% surge yesterday morning after Trump’s win goes a long way toward proving the belief-stock theory. At its closing price of $35.96 per share yesterday, Trump Media had a market capitalization of $7.8 billion. That’s a huge valuation for a company that in its most recent earnings results revealed that it had revenue of just $1.01 million for the third quarter. Which could explain why DJT shares are falling this morning: Some investors may be realizing that the stock’s postelection rise was not due to any underlying financials. Perhaps some took a closer look under the hood. If this is the case, those who bought into the stock yesterday may want to exit it today. Where does DJT go from here? The above reasons for DJT’s falling share price this morning are just two possibilities. People buy and sell stocks based on several factors—many of them emotional. What many are now wondering is: Where do DJT shares go from here? That’s a straightforward question to answer: No one has a clue. It’s impossible to predict what a stock as volatile as DJT will do today, next week, or next year, especially as Trump will be sure to dominate global headlines for the foreseeable future.
Business Economic Syndicated News 
One of the most volatile stocks of 2024 is undoubtedly Trump Media & Technology Group Corp. (Nasdaq: DJT). The president-elect’s media company, whose primary product is Donald Trump’s Truth Social social media platform, has been on an absolutely wild and unpredictable ride since it debuted on the stock market in March.
Shortly after its debut, DJT shares hit all-time highs above $71 per share. But over the next eight months, DJT shares fluctuated wildly—usually based on Trump’s perceived popularity, his chances of winning the 2024 election, or due to truly historic events like the first assassination attempt on his life on July 13. Shares had fallen to as low as nearly $12 by September when the popularity of his opponent, Vice President Kamala Harris, was near all-time highs.
But then Donald Trump had an unexpectedly quick and decisive election victory, declared in the early hours yesterday, and with that victory, DJT stock again shot up, soaring over 35% in premarket trading.
Yet today, despite Trump’s clear victory, Trump Media shares are plunging. They are currently down as much as 15% in premarket trading to just over $30.50 per share.
But why? These are two possible reasons.
Profit-taking
When any stock shoots up 35% in one day, there are going to be certain investors who want to take the win and limit any future losses. Even though these investors may like the stock and believe in the company and its future, they want to lock in their profits today. To do that, they have to sell.
If enough investors engage in this kind of profit-taking, it can actually be what halts the stock’s continued rise. Other investors see profit takers selling and know that such selling can send the stock lower, so even more investors start selling their shares before their profits evaporate, too.
Profit-taking that ends up sending a popular stock’s price lower is nothing unusual. You can see it a lot of times with some of the largest companies. For example, when Apple has a blowout quarter, many would expect the company’s shares to surge right after the earnings are announced. But what’s happened many times is Apple stock (Nasdaq: AAPL) actually drops after a blowout quarter.
This is frequently attributed by many analysts to profit-taking—investors want to lock in their profits in case this is the company’s peak financial and share price position.
So profit-taking is one possible reason DJT shares are plunging. But there is another.
The perception that Trump Media doesn’t have strong fundamentals
A big problem with Trump Media is that the company’s shares are widely seen to be a “belief stock”—a stock whose appeal is based more on the popularity of the individual associated with the company than on any sound financial fundamentals.
Trump Media’s astonishing 35% surge yesterday morning after Trump’s win goes a long way toward proving the belief-stock theory. At its closing price of $35.96 per share yesterday, Trump Media had a market capitalization of $7.8 billion. That’s a huge valuation for a company that in its most recent earnings results revealed that it had revenue of just $1.01 million for the third quarter.
Which could explain why DJT shares are falling this morning: Some investors may be realizing that the stock’s postelection rise was not due to any underlying financials. Perhaps some took a closer look under the hood. If this is the case, those who bought into the stock yesterday may want to exit it today.
Where does DJT go from here?
The above reasons for DJT’s falling share price this morning are just two possibilities. People buy and sell stocks based on several factors—many of them emotional.
What many are now wondering is: Where do DJT shares go from here?
That’s a straightforward question to answer: No one has a clue. It’s impossible to predict what a stock as volatile as DJT will do today, next week, or next year, especially as Trump will be sure to dominate global headlines for the foreseeable future.
