Trump Media stock continued its strong sell-off, reaching its all-time low as concerns about the company’s revenue growth and profits rose. It dropped to $6.43, down by 62% from the highest point this year, and this retreat may continue in the near term.
Trump Media Group is facing major headwinds
DJT stock is falling this week as the company continues to face major challenges. The main issue is that Truth Social, its main product, has not gained traction in the social media industry.
A closer look at the website shows that just a few people use it each month, many of whom are fans of President Donald Trump, who uses it as the primary platform for communication.
SimilarWeb data shows that the website had just 15 million visitors last month, a tiny amount in the social media industry. BlueSky, the social media platform that Jack Dorsey founded, had over 155 million visitors, while Threads had 500 million visitors.
Truth Social’s usage will likely drop substantially in the coming months if Democrats retake the Senate and the House of Representatives, as many pollsters believe. It will also continue falling as his approval ratings drop.
Another key issue is that Trump Media Group is not making money as many mainstream advertisers have kept away. The most recent results showed that the company, which has a market capitalization of over $2 billion, made just $1.6 million in net sales in the June quarter and $2.5 million in the first six months of the year.
The company is burning substantial cash, with net loss growing to $238 million, up sharply from $20 million in the same period last year. Its six-month loss jumped to over $643 million.
These losses mean that the company will need to raise additional capital since it ended the last quarter with $215 million in cash and equivalents, $30 million in restricted cash, and $209 million in short-term investments.
Trump Media’s main asset, its Bitcoin holdings, are also under pressure. The company holds 12,062 coins, which are currently valued at over $986 million. While Bitcoin has rebounded from its July lows, it remains much lower than its all-time high of $126,200.
Trump Media’s attempts to become a major player in the crypto ETF industry faltered as the crypto winter accelerated. It terminated its deal with Crypto.com in August, citing the prevailing market conditions.
DJT stock price technical analysis
Trump Media stock | Source: TradingView
The daily chart shows that Trump Media stock has been in a strong freefall as demand among investors has faded. It dropped below the important support level of $6.99, its lowest level on June 29. This price was the lower side of the inverted cup-and-handle pattern, a common continuation sign in technical analysis.
The stock has remained below the 50-day moving average, while the Average Directional Index (ADX) has jumped to 23, its highest level in weeks. Therefore, the stock will likely continue falling in the near term, potentially to the psychological level of $5. Eventually, the company will become a penny stock.
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