Stock price breaks below key barrier
getty
Trump Media stock (DJT) has declined significantly in November to below $15. Why is that important? Because $15 is a major barrier. It was the low point in the April tariff selloff. Here is the graph of the stock’s action with explanations…
The history of DJT and key events
John Tobey (StockCharts.com)
Following that drop, it had a one-month rebound to around $25. Then it sold off again to around $15 in August. For three months it traded around that level, attempting to create a foundation for a new rise. Therefore, the current drop below $15 could be a significant sign of trouble ahead. Also, it means virtually none of Trump Media’s investors have a gain. In such an environment, it is hard for investors to feel positive about buying or owning Trump Media stock.
Trump Media’s fundamentals are challenging
SEC filings and quarterly reports have explained the importance of Truth Social and other services, along with the ongoing additions and improvements. While the developments seem capable of spurring growth, revenues have remained stagnant. Over the last four quarters (4th 2024 though 3rd 2025), revenues have been $1 million or less. At the same time, quarterly operating expenses have been $40 million or more.
A key challenge now is understanding the addition of cryptocurrency developments over the past two quarters. They have involved $billions of borrowings, selling stock and purchasing investments and crypto currency.
These three 3rd quarter reports (Nov. 7) help explain what is happening and how to view the potential results and risks:
Trump Media’s cryptocurrency risk
While Trump Media’s basic operations are losing $millions, the cryptocurrency purchases (and risks) are in the much higher. The Forbes article highlights the business issues, including the cryptocurrency endeavors. (Underlining is mine)
KEY FACTS
The company’s bitcoin holdings fell by $48 million.
Those losses were partially offset by $33 million in gains in Cronos, another cryptocurrency.
WHAT TO WATCH FOR
The price of bitcoin has continued to fall since the third quarter ended on September 30. And Cronos is also down significantly since the end of the third quarter. Unless the value of those cryptocurrencies turns around, Trump Media is likely looking at another substantial loss in the fourth quarter.
KEY BACKGROUND
At some point between July 1 and July 21 (it’s not clear exactly when), Trump Media amassed a $2 billion stockpile of bitcoin and bitcoin-related securities, buying when the price was an estimated $118,000. The move essentially relegated its social media and streaming platforms to side hustles. Bitcoin was trading at $103,000 as of 4:30 pm ET on Friday.
The bottom line: Do not accept glowing descriptions of a major business change
The shift to cryptocurrencies and the potentially enormous effect and risk dramatically changes Trump Media’s goals and operations. This reconstruction is likely the reason the stock price broke below the $15 barrier. Adding to the problem is the lack of any fundamental support. The company has never had positive earnings and now it is borrowing and selling stock to raise cash to invest – mainly in highly volatile cryptocurrencies near their highs.
Therefore, ignore the dreams of riches. More likely, this new venture means troubles ahead.