I have been investing for several decades and the stock makes little sense to me, at least as an investment.
To me it's acting more like a gauge of voter sentiment than a stock—or moreover a gauge of voter sentiment when it comes to Trump supporters. How many democrats do you think own the stock? I'd guess very few, if any.
Take the most recent dip following the debate. It's not like anything has changed with regard to the company itself. Profitability hasn't changed, there's nothing moving the stock up or down except what shareholders, who are no doubt tied to Trump politically, feel are Trump's chances of winning.
I think it is also a way for shareholders to indicate in a very direct way whether they like what Trump is doing or not.
"We sold our shares," they say. "Because we thought you did not perform well enough during the debate and we want you to step up your game, sir."
I won't begrudge the company or its shareholders. They can do what they want with their shares and their investment. But it is not supposed to have anything to do with the valuation of the underlying business, and by all measures, the company is grossly overvalued, with the stock moving for reasons that are not tied at all to the business.
Whether or not Truth Social or Trump Media has a future, even, is debatable. I guess it would depend on what happens in November and how much interest anyone would have in Trump's social media page after the fact, especially if he loses to Kamala Harris. So, for that reason, to even call it an investment seems like a bit of a stretch.
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© 2024 Jim Bauer
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