Trump Media stock has sold off this year, and is hovering near its all-time low. It has slumped to a record low, with its market capitalization falling from over $10 billion to $1.65 billion today. This retreat may accelerate now that the Democrats have won the Senate and the House of Representatives.
Trump Media stock at risk after midterm elections
Democrats won both chambers of Congress by comfortable margins. In the Senate, they flipped seven seats to reach 54 members, and they could still pick up the Alaska seat. In the House of Representatives, they also secured a large majority.
The election is a major blow to President Donald Trump, who has used the Republican majority to avoid any scrutiny. It also means that Trump has now become a lame-duck president with little power. Most importantly, it also means that Trump will likely be impeached.
The Democratic victories mean that they will now have investigative powers, meaning that they will be able to issue subpoenas. As such, there is a likelihood that Democrats will start investigating Trump Media, especially for its subscription package that allows investors to have access to Trump’s posts before anyone else.
According to Reuters, Bloomberg and several high-frequency trading companies like Jump Trading and Susquehanna have signed up to pay $100,000 for this package. A few months before, the company said that it had signed up more than 10 clients.
In most cases, companies tend to experience heightened volatility whenever there are congressional investigations.
At the same time, the company will likely be investigated for its TAE merger. The deal, announced in December last year, will see the two companies merge in a 50/50 way. TAE will continue providing services in the nuclear fusion industry.
Trump Media’s business may deteriorate
Meanwhile, Trump Media’s core product, Truth Social, may continue to deteriorate this year. Traffic to its website has already dwindled to about 15 million a month. The deterioration will likely continue in the coming months as Trump continues losing supporters.
Trump has lost supporters across the board because of his actions as president. He lost anti-war republicans by launching the Iran war. At the same time, he lost many independents who supported his message when he was campaigning for the presidency.
All this is happening at a time when the company is not making any money. The last results showed that it had a net loss of over $238 million in the third quarter, with the adjusted EBITDA rising to a loss of over $223 million. It is unlikely that the revenue growth will start.
The only positive thing is that Trump Media is one of the biggest Bitcoin holders in the industry. It holds 12,062 coins, making it the 10th-largest publicly traded holder. As such, if Bitcoin rally continues, it means that its balance sheet will continue improving.
Trump Media stock technical analysis
The daily chart shows that the DJT stock has been in a strong sell-off in the past few months. It crashed below the crucial support level of $6.97, its lowest level in June.
The stock has slumped below all moving averages and the Supertrend indicator. Also, the Relative Strength Index (RSI) and the MACD have continued falling.
Therefore, the most likely scenario is where the stock continues falling, potentially below the key support level of $5.