Trump Media Is Moving Into Financial Services. Is DJT Stock a Buy, Sell, or Hold Now?
Now, the company is venturing into fintech with Truth.Fi, a foray into cryptocurrencies, exchange-traded funds (ETFs), and customized investment vehicles. TMTG plans to funnel up to $250 million into digital assets and 'Patriot Economy' investments, signaling ambitions beyond social media. With Charles Schwab (SCHW) in the mix, Trump Media could soon offer financial products to retail investors, amplifying its market presence.
TMTG has been bleeding cash and its growth has stalled as investor confidence wanes. Will Truth.Fi help build the foundation of a legitimate financial empire or end up just another headline-fueled frenzy?
About Trump Media & Technology Stock
Founded in 2021, Florida-based Trump Media & Technology Group (DJT) made waves with its high-profile SPAC merger. With a $6.6 billion market capitalization, TMTG aims to disrupt the digital media landscape. The company's Truth Social, aims to provide a free-speech-oriented alternative to legacy social media platforms, while Truth+ offers family-friendly streaming content.
DJT stock slipped 61.4% from its March highs of $79.38, with a 36% drop over the past 52 weeks. However, shares gained 6.8% on Jan. 29 after Trump Media unveiled its Truth.Fi brand, signaling a major push into fintech. The move has sparked notable valuation gains and renewed investor interest.
From the valuation standpoint, DJT stock is priced at 1,013.23 times sales, trading at a significant premium to the industry average.
Trump Media's Q3 Shows Setbacks but Cash Flow Remains Strong
On Election Day, Trump Media reported its Q3 earnings, and the market reacted with a sharp dip in its stock price on Nov. 6. Revenue barely hit $1 million, down 5.6% year-over-year, while operating losses surged to $23.7 million, up from $3 million last year. Legal costs, software expenses, and finance fees inflated the company's general and administrative expenses to $17.7 million, with a net loss of $19.2 million or $0.10 per share.
Despite the struggles, TMTG's cash position remains strong, with $672.9 million in hand and zero debt. The company leaned into this financial strength to boost its new venture, Truth+, its streaming service. During Q3, TMTG launched a content delivery network, native mobile apps, and expanded its web and connected TV access, signaling an aggressive push to expand in the competitive streaming space.
While Truth Social initially gained traction as a free speech haven following Trump's social media bans, the landscape has shifted with other platforms like Facebook, Instagram, YouTube, and X (formerly Twitter) lifting restrictions. This has left Truth Social with lower engagement and monetization, while its streaming service is unlikely to make a significant impact until next year.
Trump Media Bets Big on Fintech
Trump has stirred up a crypto storm recently, launching a meme coin frenzy and now diving headfirst into the world of finance. Trump Media & Technology Group is rolling out Truth.Fi, a financial services division designed to offer a suite of tailored financial products to its loyal user base.
The company has partnered with Charles Schwab to provide investment advice and strategy, with plans to offer customized separately managed accounts (SMAs), ETFs, and investments in Bitcoin (BTCUSD) and other crypto-related assets. Truth Social CEO Devin Nunes says the financial products are aimed at 'American patriots' seeking protection from what he calls the growing threats of censorship, de-banking, and privacy violations.
This move follows closely behind the debut of $TRUMP, a cryptocurrency launched by the president himself. It also comes on the heels of Trump's recent criticisms of Bank of America (BAC) and JPMorgan Chase (JPM) for allegedly restricting conservatives' access to banking services.
To kick-start Truth.Fi, TMTG is allocating $250 million from its roughly $700 million cash pile to be custodied by Schwab. The funds will be directed toward American growth, manufacturing, energy, and other investments designed to support what TMTG calls the 'Patriot Economy.' Truth.Fi is set to roll out its financial products later this year.
Trump Media Faces Uncertain Future
Trump Media stands at a crossroads, straddling ambition and financial fragility. A healthy cash reserve offers some breathing room, but mounting losses demand a clear path to scalability - one the company has yet to chart. Its core business - Truth Social and streaming platform Truth+ - lacks the engagement and monetization needed to justify its market cap. Revenues remain anemic, with only $2.6 million in sales across three quarters, raising concerns about long-term viability.
The company's pivot into fintech and crypto investments via Truth.Fi signals an attempt to revitalize growth, but uncertainty looms. For now, DJT remains a stock ruled by headlines, not fundamentals. Without a compelling growth story beyond hype, Trump Media risks being just another overvalued meme stock, teetering on the edge of investor patience and market gravity.
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