Summary
- Trump Media faces significant downside risk with the upcoming lock-up expiration, particularly with Donald Trump’s large share position and funding needed for the election.
- The company reported another weak quarter, with revenue below $1 million and rising expenses, highlighting a lack of business progress.
- Despite launching new ventures like Truth+ and a CDN, Trump Media has not detailed plans for growth or secured new content partners.
- The stock’s valuation is unrealistic given the company’s minimal revenue and lack of growth, making the current $4 billion market cap unsustainable.
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Since the initial SPAC approval, the whole focus of Trump Media & Technology Group Corp. (NASDAQ:DJT) has been the expiration of the major share lockups from the going public process. The main focus is definitely former President Trump’s shares, amounting to the majority of the company. My investment thesis remains ultra-Bearish on the stock following another weak quarter and the large share lock-up expiration in September.
Another Dismal Quarter
Back in early August, Trump Media released Q2’24 results without providing investors a lot of details. The social media company reported revenue slid below $1 million while expenses jumped, mostly due to going public costs.
Source: Trump Media Q2’24 10-Q
The original SPAC deal was announced in late 2021 and the Truth Social site was launched in early 2022, yet the business hasn’t really evolved much. Even worse, Donald Trump recently started posting on Twitter/X again after doing a Spaces interview live with Twitter/X owner Elon Musk.
