The Trump Media stock price has remained in a tight range in the past few months. DJT stock was trading at $16, a range it has remained at in for a while. This article explains why it has crashed and what to expect.
Why the Trump Media stock price has crashed
There are a few reasons why the DJT stock price has crashed this year. First, there are signs that TruthSocial, its core product, is not gaining market share in the social media industry.
Data compiled by SimilarWeb shows that its total visits rose by 32% in September. While this increase is a good thing, the total visits stood at just 20.8 million. This is a small amount for a company valued at over $4.4 billion.
TruthSocial is not making any money, even with Donald Trump being in the White House. Its net sales in the most recent quarter stood at just $1 million, down from $1.07 million in the same period last year.
It is also losing substantial sums of money, with its net loss coming in at $19 million. This performance will likely continue as the company’s business continues to struggle amid rising competition from the likes of X and Mastodon.
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Devin Nunes, the CEO, noted that the low revenue figures are because the company is still in its early stage of its development. However, the company was started in 2021 and its app was launched in 2022. As such, one would expect its business to be doing much better.
DJT stock price has also plunged because of the ongoing performance of Bitcoin treasury companies. This is notable since the company holds 15,000 coins currently valued at over $1.65 billion. It has become the eighth-biggest player in the industry.
Bitcoin mining stocks have plunged in the past few months. MSTR stock price has plunged by 46% from its highest point in 2024, while Metaplanet is down by over 80% from the year-to-date high.
Additionally, it is unclear whether its TV initiatives will succeed as the streaming sector is highly competitive. Some of the top companies offering these streaming services are Disney+, Amazon Prime Video, and Disney+.
On the positive side, the company has a strong balance sheet with a large hoard of Bitcoin and over $673 million in cash and short-term investments.
DJT stock price technical analysis
The weekly chart shows that the Trump Media stock price remains under pressure this year. It has remained at $16 in the past few months. This is an important level as it is slightly above the important support point at $11.95, its lowest level in 2023 and September last year.
DJT stock remains below the 50-week moving average, while the Average Directional Index (ADX) has plunged to the lowest level in months. The falling ADX indicator is a sign that it lacks the momentum.
Therefore, the most likely scenario is where it continues falling as its fundamentals weaken. However, the main risk for shorting the stock is that it is highly shorted and may go through a short-squeeze.
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