Trump Media (NASDAQ: DJT) stock is posting big gains again in Tuesday’s trading. The company’s share price was up 19.6% as of 2 p.m. ET and is now up 33.5% over the last week.
Trump Media stock is seeing continued bullish momentum following Tesla CEO Elon Musk’s appearance at a presidential campaign rally for Donald Trump over the weekend. The social media company’s share price may also be gaining ground, thanks to purchases from meme-stock investors and short-squeeze momentum.
Trump Media is benefiting from rising meme-stock status
Elon Musk’s campaign rally in Butler, PA over the weekend appears to have given Trump Media meme-stock momentum. Musk has previously been influential in powering meme-based rallies for cryptocurrencies including Dogecoin and Shiba Inu, and it looks like the Tesla and X CEO’s support for Donald Trump is now powering big gains for Trump Media stock.
On the heels of recent gains in the company’s share price, Trump Media stock may also be benefiting from a moderate short squeeze. While short interest on the stock isn’t particularly high, explosive gains may be causing some short-sellers to cut their losses by buying back shares. In turn, this could be pushing the company’s share price even higher.
What comes next for Trump Media stock?
Even after a recent surge of bullish momentum, Trump Media stock is still down roughly 67% from the high that it hit shortly after going public through a merger with a special purpose acquisition company (SPAC) earlier this year. With the company recently attracting increased attention from meme-stock investors, it’s possible that its share price could continue to make big upward moves in the near term. For better or worse, developments in the presidential race will likely also have a significant impact on the stock’s near-term performance.
In terms of long-term catalysts, the picture is less clear. While Trump Media has made its Truth Social media platform the centerpiece of its business, the service appears to be attracting relatively low levels of engagement and hasn’t been generating much revenue. In the second quarter, Trump Media reported revenue of just $828,000 and a net loss of $16.4 million.
For a company launching and scaling social media and streaming services, the losses actually look quite small. There’s a good chance that the business will need to significantly increase spending if it hopes to carve out a lasting place in highly competitive technology and media categories.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Trump Media Stock Is Soaring Again Today was originally published by The Motley Fool
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