Trump Media & Technology Stock Stays Volatile After Debate

Trump Media & Technology Group (DJT) stock has been volatile since the media company merged with special purpose acquisition company (SPAC) Digital World Acquisition in late March. And DJT stock is on the move again following Thursday night's presidential debate between current President Joe Biden and former President Donald Trump.

Indeed, DJT stock is down nearly 38% since March 26, but gained more than 37% in the five days leading up to the debate. Today, shares rallied as much as 17% in pre-market trading before giving up those gains at the open. DJT stock was last seen trading down by about 2%.

Is DJT stock a buy, sell or hold?

Given this volatility, many market participants may be wondering if DJT stock is worth buying, but the truth of the matter is it remains a risky proposition for investors. 

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One warning sign is that there is currently no analyst coverage on shares of Trump Media & Technology, at least as far S&P Global Market Intelligence is concerned. Analysts typically have access to research and information not readily available to retail investors, so having their insight is helpful when determining the best stocks to buy, as well as the worst.  

That said, Interactive Brokers Chief Strategist Steve Sosnick offered some insight on DJT stock a few months back.

In a March 26 note, Sosnick said he believes there are "political motivations driving the stock," and "that the company's most devoted investors viewed it as a call option on the MAGA movement."

DJT stock's underlying fundamentals also make it speculative investment for market participants. For instance, in late May, the company reported first-quarter earnings results, showing $770,500 in revenue, down from $1.1 million in the year-ago period. Trump Media & Technology Group also posted a net loss of $327.6 million, compared with a loss of $210,300 the year prior. 

The widened net loss included a $311 million non-cash expense from the conversion of promissory notes and other transactions related to its merger with Digital World Acquisition.

However, Sosnick says that it if "one's investment decisions are based primarily upon emotions, then it is hardly a surprise that standard valuation metrics will be cast aside. True believers don't really care about prosaic concerns like price-to-earnings (P/)E ratios and the like. They're not doing detailed calculations about the discounted future cash flows of their favorite stocks."

DJT is hardly a penny stock and Trump Media & Technology Group boasts a market cap north of $6 billion. Nevertheless, DJT stock remains a very risky and speculative play for market participants and if you do decide to trade it, do so in a small amount with money you can afford to lose. 

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