Trump Media & Technology Group (DJT) stock price continued its strong downtrend this year, continuing a trend that started before the US election. The DJT share price has crashed to $20, its lowest level in six months. This decline has led to a $6 billion wipeout as the market cap has crashed from over $10 billion to $4 billion.
DJT stock crashes as the Trump hype cools
The Trump Media & Technology stock price has crashed this year as investors remain concerned about the company’s trajectory. It has also plunged as part of the ongoing retreat of companies associated with Trump and his administration.
A good example of this is Tesla, whose stock has plunged in the past few months. After peaking near $500 after Trump won the election, Tesla stock has crashed by over 50% to the current $248.
Other companies that were set to benefit from the Trump administration have continued falling this year. A good example of this is Geo Group, one of the biggest private prison companies in the US. Its stock initially surged after Trump won the election as investors remained optimistic of more business because of his promise to increase deportations.
Geo Group stock crashed by about 30% from its highest level in November last year. Similarly, CoreCivic, a company that offers private prison services has dropped by 20% from its highest level in that period.
This performance is in line with what has happened in the past. In most cases, companies that analysts expect will thrive during a certain administration don’t do well.
For example, the general view was that oil and gas companies would thrive under Trump because he insisted on supporting the industry. Today, most oil and gas stocks have plunged from their November highs.
Similarly, most analysts anticipated that cryptocurrencies would surge after Trump’s election. While most of them did rise after that, recent data shows that many of them have crashed.
Read more: DJT stock price forecast: can Trump save this sinking ship?
Trump Media business is struggling
The other reason why the DJT stock price has crashed is that there are serious concerns about the Trump Media business plan.
Recent data shows that traffic to TruthSocial has jumped in the past few months because it has become the main communication channel.
Traffic jumped by 33% in February to 25.17 million, which is a positive thing. However, the monthly traffic is still much lower than other companies. For example, Reddit had over 3.4 billion visits, while Elon Musk’s X had over 4.2 billion visits.
It is unclear whether this traffic bump will lead to higher revenues and profits. While revenue may rise as companies seek favor with Trump, it is unlikely that the revenue growth will be sustainable.
The most recent results showed that Trump Media is a fairly small operation. Recent data showed that the company’s net sales stood at just $1.01 million in the third quarter and $2.6 million in the nine months. It had a net loss of over $19 million and $363 milion in the same period.
Trump Media stock price analysis
The daily chart shows that the DJT share price has remained in a strong bear market this year. It has dropped below the crucial support level at $26.46, the lowest swing in November last year.
The stock has moved below the 50-day and 100-day Exponential Moving Averages (EMA). Further, the Relative Strength Index (RSI) and the MACD indicators have continued falling this year.
Therefore, the stock will likely continue falling as sellers target the next key support to watch will be at $11.9, the lowest swing in September last year. This price is about 41% below the current level.
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