Trump Media & Technology Group (NASDAQ:DJT), the parent company behind Donald Trump’s alternative social media platform, is no stranger to volatility. In its brief half-year as a publicly-traded company, DJT has experienced significant price swings in both directions. Currently, the stock is down 77% from its late-March peak.
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Looking ahead, Daniel Jones, a 5-star investor ranked in the top 3% of TipRanks’ stock pros, warns that the worst may not be over.
“Investors should be cautious as the company’s fundamentals suggest it is worth significantly less, with potential for a further decline of 80% or more,” Jones opined.
Jones’ concerns stem from comparisons to other social media platforms, particularly DJT’s low daily active user numbers, which pale in comparison to giants like Facebook, Snap, and X (formerly known as Twitter).
Beyond the poor metrics, the investor cites other reasons for concern. Chief among them is the possibility that Trump, despite claiming he won’t, could sell a large portion of his shares now that the lock-up period has expired. Given Trump’s history of changing his stance, this scenario can’t be entirely ruled out. In addition, Jones points to ongoing legal battles with DJT’s second- and third-largest shareholders, calling it “quite telling about the company.”
Moreover, Jones sees scant evidence that a win in the presidential election would materially change DJT’s performance, overtly dismissing one of the principal arguments cited by the bulls. “The fact of the matter is that politics are so polarized today that a win in November is not going to cause some surge in the number of users for the platform. And a loss is not likely to result in users churning off,” Jones explained.
Believing that “further downside is almost certain,” Jones strongly advises investors to steer clear of the “drastically overvalued” DJT, maintaining a Strong Sell rating on the stock. (To watch Jones’ track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
