Trump Media Stock Faces ‘Serious Risks’ Amid Management Decisions and Declining Value
Photograph: Charly Triballeau/AFP/Getty Images
Shares of Trump Media Stock (DJT) are under scrutiny this week, with Forbes reporting that the stock faces “serious risks” due to management decisions and declining market value. The concerns primarily revolve around the company’s recent failure to hold an earnings call, a move that the publication suggests was likely influenced by former President Donald Trump, the majority shareholder.
Forbes highlighted that the absence of an earnings call left investors in the dark about future plans and expectations for Truth Social, Trump Media’s flagship platform. “Investors did not receive information about future plans and expectations of how things could improve,” the report stated, raising concerns about transparency and the company’s direction.
While CEO Devin Nunes has a duty to look out for all shareholders, Forbes pointed out that he is legally permitted to prioritize Trump’s interests, given that Trump owns well over 50% of the shares. This may have influenced the decision to skip the earnings call, leaving minority shareholders with limited insight into the company’s performance and prospects.
Forbes noted that many minority shareholders might lack a “strong investment reason” to retain their stakes in the volatile stock. Much of this stock was acquired in unconventional ways—such as payment for services, repayment of cash loans, or through low-cost or free positions stemming from the Digital World Acquisition origination and merger activities. With many of these shares becoming eligible for sale as early as September, there is potential for significant selling pressure on the stock.
Trump, whose shares are mostly locked up and therefore unsellable at the moment, could potentially be granted an exemption by the board, allowing him to sell some of his shares early while still maintaining control of the company. “Therefore, selling now would allow him to capture current prices and raise cash prior to the expected September selling by others,” Forbes explained.
Adding to the concerns, the report cited the erosion of the Trump brand as a significant risk for investors. Trump Media stock has plummeted 70% in less than six months since the March 25 merger, indicating that the company is struggling. Furthermore, Trump’s absence from the company as he focuses on his presidential campaign raises questions about his future involvement and the company’s leadership.
Forbes warned that Trump Media stock might soon lose all the gains it made during the initial excitement surrounding the merger earlier this year. “At that point, many fans would face the possibility of DJT continuing to make its way downward until it reaches its low fundamental level,” the report concluded. The report paints a bleak picture for Trump Media Stock, urging investors to consider the serious risks as the company navigates through these turbulent times.
