Shares of Trump Media & Technology (NASDAQ:DJT) have provided investors with plenty of action, despite only having been listed now for one week. Today, DJT stock is on the rise, gaining more than 7% in a volatile session that has seen other high-profile meme stocks and cryptocurrencies head lower.
Yesterday, we reported on how shares of DJT stock plunged after the company released its 2023 results, which showed $58 million in losses. Additionally, the company issued a going concern warning, prompting many investors to say, “it’s not for me,” and search for other meme stocks to invest in.
That said, today’s rally appears to highlight the speculative fervor that still surrounds this stock, with plenty of meme investors ready to step in and take positions. Let’s dive into what to make of today’s move and what may be the cause for this rally.
Why Is DJT Stock Up Today?
After yesterday’s double-digit decline, some investors may certainly have anticipated some sort of make-up rally today. This rally has come in better than expected (at least in my view), with DJT stock gaining throughout the trading session.
It’s also important to keep Trump Media’s recent rise in context. The company went public at a price of $14 per share one week ago, surging to nearly $80 on its first day of trading. Thus, with DJT stock still trading at around the $52 level (down 35% from its peak), this is still a stock that’s up more than 270% over the span of a week.
Of course, as is the case with many initial public offerings (IPOs), price volatility early on is commonplace. The market will certainly take time to engage in price discovery, with the value of this company largely tied to Trump’s brand. Accordingly, many are starting to view this stock as a proxy bet on the outcome of the upcoming election and whether or not former President Trump will return to the White House.
I’m not sure enthusiasm around Trump’s chances in November is really what’s driving the boat today. Indeed, it appears it’s another speculative rally lacking any sort of clear fundamental catalyst. This is a company, like any other, and is one that probably doesn’t deserve this valuation. That said, a company is worth what investors are willing to pay, so just as with any meme stock — the sky could be the limit. This will certainly be a fun stock to watch from here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
