An image of Donald Trump pointing to the crowd in front of an American flag background_ Image by Jonah Elkowitz via Shutterstock_
Trump Media & Technology Group's (DJT) stock fell to a record low last week. The company, which also owns Truth Social, has been sliding despite the S&P 500 Index ($SPX) sitting near record highs. In an article in 2024, when Donald Trump was moving closer to securing the GOP nomination for the 2024 presidential election, I noted that it would be prudent to stay clear of Digital World Acquisition—the special purpose acquisition company (SPAC) that announced a merger with Trump Media and Technology Group (TMTG).
Trump went on to become the 47th U.S. President, and just as with his previous presidency, "Trump trade" was in action this time as well. However, the ultimate beneficiary wasn't DJT but other names, particularly Tesla (TSLA), which soared following the election. With DJT down over 50% for the year and its market cap below $2 billion, let's explore whether investors should buy the dip or whether more downside awaits.
To begin with, let's briefly analyze TMTG's current business and financials. Its most visible asset is Truth Social, a platform seemingly created as an alternative to Twitter (now X) after the microblogging site banned Trump. However, with X now part of an Elon Musk-run company, there seems little need for another conservative-friendly social media platform. Notably, while Truth Social does not officially release its user numbers, independent reports suggest that the daily user count has fallen sharply after peaking last year.
The platform's USP is Trump, who has over 13 million followers. The company has started monetizing Trump by selling faster access to the President's posts (which was immediately met with legal challenges). In its Q2 2026 earnings call, DJT said that it has signed up over 10 customers for the API service and is in "active conversations" with news organizations, hyperscalers, and large language data developers. While the company sells the feed of the top 10 influential accounts on the platform as part of the API, for all practical purposes customers sign up for early access to Trump's posts, which have the potential to move financial markets. The service is in "early innings" per TMTG, but I doubt there would be many takers once Trump remits office.
TMTG also owns the Truth+ streaming offering, which the company says "is home to pro-freedom news networks like Newsmax, Real America's Voice, OAN, and more—as well as a large library of top-tier non-woke TV shows and movies." While the brand positioning would appeal to a section, it's worth noting that even entrenched streaming players like Netflix (NFLX) and Disney (DIS) are struggling to add new members.
Trump Media even has a financial services arm: Truth.Fi, which is working on "America First investment vehicles." Among others, it is working with Crypto.com to bring their prediction market solutions to its members.
Additionally, DJT held $1.2 billion worth of Bitcoin (BTCUSD) and other digital assets at the end of June. Looking at its market cap, the company's business looks akin to Bitcoin treasury companies like Strategy (MSTR).
If the company wasn't diversified enough, it has proposed a merger with TAE Energy, a nuclear fusion company. The combined company plans to construct the first-ever utility-scale fusion power plant. The merged entity plans to power the "AI revolution" as it aims to capitalize on the buzzword that has been powering markets for over three years now.
A simple glance at DJT's various businesses would tell us that it happens to benefit from the President's supportive policies towards cryptocurrencies, prediction markets, and even his views on unrestricted AI development. Else, it aims to capitalize on conservative angst (whether right or wrong) against "woke Big Tech" and media companies.
Meanwhile, like most, if not all, former SPACs, DJT's financial performance is not even close to what it talked about during the merger. In Q2, its revenues were a paltry $1.7 million, and while the number rose 89% year-over-year (YoY), it provides little succor. The net loss soared tenfold to $238 million over the period due to mark-to-market losses on its Bitcoin investment and legacy legal expenses tied to its controversial SPAC merger.
TMTG also announced a leadership transition in April and appointed Kevin McGurn as its interim CEO. McGurn succeeded David Nunes, a former Republican congressman from California. Unlike Nunes, who did not have any experience in the media business and was previously in the dairy farming business, McGurn brings significant experience in streaming and advertising. In his first earnings call in August, McGurn said all the right things about providing regular updates and communication from the company and, importantly, about being more open about things.
However, I am still not sold on the idea of DJT being a good investment, especially with Trump nearly halfway into his presidency. No wonder the company is now betting on a nuclear fusion firm to drive the next leg of its growth. While there could be a short-term bounce in DJT stock, I believe it would be short-lived and would instead be an opportunity to exit the name.
On the date of publication, Mohit Oberoi had a position in: TSLA, NFLX, DIS. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
