Trump Media Group stock extended its freefall on Friday as investors came to terms with the election results, in which Democrats won big. DJT has slumped to $3.99 and is down by 70% this year and by 76% from its highest point since January. This sell-off will likely continue as the company publishes its earnings later today.
Trump Media Group’s business is struggling
Trump Media Group, the company that owns Truth Social, has been one of the worst performers on Wall Street this year. The weakness continued last week after American voters delivered a major blow to President Donald Trump and the Republicans.
Democrats are on track to win 56 seats in the Senate and about 260 in the House of Representatives. The vote was largely a condemnation of President Trump, who has led to a surge in inflation because of his tariffs and the ongoing US-Iran war.
The election results confirmed what polls have been showing in the past few months. Most polls showed that he was losing popularity, including among the MAGA base.
Another sign of his waning popularity was the traffic to Truth Social, the platform he prefers communicating with. SimilarWeb data shows that the platform had a traffic of just 11.80 million in October, down by 22.9% from the previous month. This decline happened even ahead of the midterm elections, when he was regularly making announcements.
Democrats have vowed to investigate Donald Trump’s corruption. One of them revolves about Truth Social, which has started charging users $100,000 for early access to his posts. The service has already received a handful of customers, who are using the posts to execute their trades.
Trump Media to publish earnings
The next important catalyst for the DJT stock is the upcoming earnings, which will provide more details about its revenue, especially after the subscription product launch.
Its last earnings report showed that its net loss stood at $238 million on revenues of just $1.7 million. The loss was much higher than the $20 million that it lost in the same period last year, and was mostly because of its Bitcoin holdings.
Trump Media’s earnings are expected to show that its revenue remained constrained as large advertisers have ignored the platform.
The biggest risk that the company faces is that its main product is associated with Trump, a president who has become a lameduck. As such, with his power falling, chances are that its traffic will continue falling over time.
DJT stock price technical analysis
The daily chart shows that the DJT stock has been in a steady downward trend in the past few months, and is now trading at a record low. It has already crossed the important support level of $6.98, its lowest level in June this year.
The stock has remained much lower than all moving averages, a sign that bears remain in control. Also, the Relative Strength Index (RSI) has become extremely oversold.
Therefore, the most likely scenario is where the stock continues falling, potentially to the psychological level of $3.50. A move below that level will point to more sell-off towards $3.50.