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USA Today
3 days ago
- Business
- USA Today
Is Trump Media stock a buy after dropping over 50% from its 52-week high?
Is Trump Media stock a buy after dropping over 50% from its 52-week high? Show Caption Hide Caption What is 'TACO trade,' a new phrase angering President Trump? 'TACO trade' is a jab at President Donald Trump's propensity to impose or threaten tariffs and later back off. Perhaps no stock's performance is more impacted by President Donald Trump's actions than Trump Media & Technology Group (NASDAQ: DJT). Although the Trump administration's recent tariff policies affected the entire stock market, Trump Media has specifically stated its success depends in part on President Trump's popularity. This has played out in Trump Media's share price, which zoomed up to a 52-week high of $54.68 just days before the presidential election. But economic uncertainty fueled by inflation and further impacted by the dynamic tariff situation sank the company's stock. At the time of this writing, its share price is less than half what it was before Donald J. Trump's election win. Does this bring Trump Media shares into buy territory? Or do reasons exist to avoid the stock? Let's dig into the company to find out. Trump Media's business performance Trump Media relies entirely on revenue from digital advertising run on Truth Social, its social media platform. The company also provides consumers a streaming video product, Truth+, and recently announced a financial offering called However, by the end of the first quarter, neither Truth+ nor had produced income. Trump Media's sole source of sales, Truth Social, delivered $821,200 in Q1 revenue, a 7% increase from the prior year. This is a promising start to 2025 since the company ended 2024 with a 12% year-over-year decline in sales to $3.6 million. In addition, Trump Media boasts a strong balance sheet. Total assets were $918.9 million compared to $27.2 million in total liabilities at the end of Q1. The company has amassed a war chest of $759 million in Q1 cash, cash equivalents, and short-term investments. But that's where Trump Media's strengths end. Areas of concern with Trump Media An investment in Trump Media carries several outsized risks. Perhaps the biggest is that 93% of its revenue comes from a single customer. If that client decides to leave, Trump Media's income collapses. Also, the company is standing on shaky financial ground. Trump Media is not profitable, with a Q1 net loss of $31.7 million. This is because its Q1 operating costs totaled $40.4 million. But a greater issue is the tepid revenue generated from Trump Media's offerings. Truth Social's sales aren't covering its expenses, so it's crucial for the company's new Truth+ and products to provide income soon. Another concern is that Trump Media noted in its Q1 earnings report that there existed "material weakness in our internal controls over financial reporting," and it lacked "accounting personnel who have the requisite experience in [Securities and Exchange Commission] reporting regulation." This means its financial statements could contain errors and, depending on the extent of those mistakes, may lead to a misrepresentation of Trump Media's finances. Although the firm is working to address this issue, the integrity of its earnings reports is questionable at this time. Making a decision on Trump Media stock Trump Media is in a precarious predicament, given the high costs of operating its business relative to the meager sales it's bringing in. However, its emerging products might deliver the revenue Trump Media desperately needs, and its excellent balance sheet can sustain the company while these products build up their income streams. So, does the company's substantial stock price drop from its 52-week high tip the decision toward purchasing shares? Answering this question requires assessing whether its stock valuation is reasonable. You can gauge this with the price-to-sales (P/S) ratio, which tells you how much you're paying for every dollar of revenue the company earned during the trailing 12 months. This metric is commonly used to evaluate stocks for unprofitable businesses, such as Trump Media. Over the past year, the company's P/S multiple has undergone wild swings. Although it's not at its peak at the time of this writing, it's still exceedingly elevated, suggesting the stock is overpriced despite falling more than 50% from its high. Given a pricy stock combined with significant risks, such as the potential for financial reporting errors and reliance on a single customer for nearly all its revenue, Trump Media shares are not a good investment at this time. Perhaps the company deserves another look if its Truth+ and products eventually generate sales. For now, there aren't enough compelling reasons to buy Trump Media stock. Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Trump Media & Technology Group right now? Offer from the Motley Fool: Before you buy stock in Trump Media & Technology Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Trump Media & Technology Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $639,271!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $804,688!* Now, it's worth notingStock Advisor's total average return is957% — a market-crushing outperformance compared to167%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor. See the 10 stocks »
Yahoo
4 days ago
- Business
- Yahoo
Trump's control over Truth Social could weaken as new shares are issued
The election of Donald Trump provided a big boost for Bitcoin, as the incoming president promised to make the U.S. 'the crypto capital of the planet.' But when Trump Media & Technology Group announced on Tuesday it was investing $2.5 billion in a Bitcoin reserve, his company's stock plunged 10%. It has recovered slightly since, but is still at its lowest point in the past month. That's likely because in diluting the Trump family's share of the company's stock below 50%, the Trumps could be outvoted. The company — which owns Truth Social, the social media site launched in 2022, a year after the Jan. 6 insurrection — has never made a profit. Before it went public in March 2024, Donald Trump owned 90% of the company. Since returning as president, he put his shares in a 'revocable trust,' in the name of his son Donald Trump Jr., with 114.8 million shares in Trump Media before Tuesday's announcement, which adds 58.3 million shares to the issuance plan. The company does not have a separate share class with voting rights, which now puts Trump control of Trump Media in jeopardy. Earlier this month, Barron's reported that Trump Media's CEO, former California congressman Devin Nunes, 'was awarded $47,640,469 in stock and cash compensation last year, when the company's revenue was $3,618,800. That put Nunes' compensation at 13 times annual revenue.' This time last year, Trump Media was considered a meme stock. In Q1 2025, the company posted a net loss of $31.7 million, with operating costs of $40.4 million, though revenue was up 7% year-over-year. That was a bump after its 2024 ended with a 12% year-over-year decline. Last October, Trump Media expanded beyond Truth Social to launch a video streaming service, Truth+, 'where you can watch the news you trust and shows and movies that Big Media has tried to blacklist,' according to the company's website. Earlier this year it launched a financial services platform, For the latest news, Facebook, Twitter and Instagram. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Trump Media announces $2.5B deal to create bitcoin treasury
The Trump Media and Technology Group on Tuesday announced a $2.5 billion deal with institutional investors to create a bitcoin treasury. The company said in a release that the deal, which is expected to close by about Thursday, May 29, will feature a $1.5 billion stock issuance as well as $1 billion in convertible notes. The $2.5 billion deal is being carried out through a private placement offering and will finance the creation of the bitcoin treasury. Trump Media is the parent company of social media app Truth Social. "We view bitcoin as an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets," said Trump Media CEO Devin Nunes. Trump Media And Partner On Etf Offerings Nunes explained that the company views the cryptocurrency treasury as a way to secure Trump Media from financial institutions that could harass or discriminate against the firm. Read On The Fox Business App "Our first acquisition of a crown jewel asset, this investment will help defend our Company against harassment and discrimination by financial institutions, which plague many Americans and U.S. firms, and will create synergies for subscription payments, a utility token, and other planned transactions across Truth Social and Truth+," Nunes said. "It's a big step forward in the Company's plans to evolve into a holding company by acquiring additional profit-generating, crown jewel assets consistent with America First principles," Nunes added. Trump Media Shares Surge After Company Announces Expansion Into Financial Services and Anchorage Digital will provide custody services for Trump Media's bitcoin treasury. Trump Media stock declined about 10% during the trading session as of Tuesday morning. In January, Trump Media announced plans to launch which will offer financial services and products, including multiple investment vehicles, that it said will be rolled out this year. Trump Media in March partnered with to offer exchange-traded funds (ETFs), including ETFs focused on digital assets and a basket of cryptocurrencies, including article source: Trump Media announces $2.5B deal to create bitcoin treasury Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Trump Media to sell $2.5B in stock and notes in Bitcoin treasury deal
Trump Media (DJT) and Technology Group announced that it has entered into subscription agreements with approximately 50 institutional investors, under which the company agreed to issue and sell approximately $1.5B in the company's common stock and $1.0B in principal amount of 0.00% convertible senior secured notes, for gross proceeds of an aggregate approximately $2.5B, in a private placement offering that is expected to close on or about May 29. The company intends to use the proceeds for the creation of a Bitcoin (BTC) treasury. 'One of the largest Bitcoin treasury deals of any public company, the move closes Trump Media's previously announced special acquisition fund, which is one of numerous ways, including through potential mergers and acquisitions, that the company is aiming to expand its reach throughout the America First economy,' the company stated. The $2.5B offering, comprising approximately $1.5B in Trump Media common stock at the last market price and $1.0B in convertible notes at a conversion price equal to a 35% premium, will place Bitcoin on Trump Media's balance sheet alongside existing cash, cash equivalents, and short-term investments totaling $759.0M as of the end of the first quarter of 2025. Trump Media's CEO and Chairman Devin Nunes said, 'We view Bitcoin as an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets. Our first acquisition of a crown jewel asset, this investment will help defend our Company against harassment and discrimination by financial institutions, which plague many Americans and U.S. firms, and will create synergies for subscription payments, a utility token, and other planned transactions across Truth Social and Truth+. It's a big step forward in the Company's plans to evolve into a holding company by acquiring additional profit-generating, crown jewel assets consistent with America First principles.' Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on DJT: Disclaimer & DisclosureReport an Issue Trump Media to sell $1.5B in stock, $1B in convertible senior secured notes Trump Media plans to raise $3B to spend on cryptocurrencies, FT reports Is Trump Poised to Raise $3B to Buy Up Cryptocurrencies? Now Streaming: Sesame Workshop, Netflix enter streaming deal Truth Social Expands Truth+ Streaming to Major TVs Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Trump Media to sell $1.5B in stock, $1B in convertible senior secured notes
Trump Media (DJT) and Technology Group announced that it has entered into subscription agreements with approximately 50 institutional investors, under which the company agreed to issue and sell approximately $1.5B in the company's common stock and $1.0B in principal amount of 0.00% convertible senior secured notes, for gross proceeds of an aggregate approximately $2.5B, in a private placement offering that is expected to close on or about May 29. The company intends to use the proceeds for the creation of a Bitcoin treasury. 'One of the largest Bitcoin treasury deals of any public company, the move closes Trump Media's previously announced special acquisition fund, which is one of numerous ways, including through potential mergers and acquisitions, that the company is aiming to expand its reach throughout the America First economy,' the company stated. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on DJT: Disclaimer & DisclosureReport an Issue Trump Media plans to raise $3B to spend on cryptocurrencies, FT reports Is Trump Poised to Raise $3B to Buy Up Cryptocurrencies? Now Streaming: Sesame Workshop, Netflix enter streaming deal Truth Social Expands Truth+ Streaming to Major TVs Trump Media's Truth+ brings on-demand content to Roku TVs Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
