Trump Media shares surge after a miserable run. Pros say stay away
Shares of Trump Media & Technology Group surged 26% on Thursday, marking a second consecutive day of strong gains.
The rally over the past two days marks a rare reprieve for the company behind the Truth Social app, which is trading under the stock symbol DJT. The stock ended up more than 15% on Wednesday.
Trump Media shares are still down sharply since their spectacular stock market debut in late March. The declines have wiped out billions of dollars in value, including for former President Trump.
Nonetheless, the recovery in shares over the past two days was cheered by Truth Social members who identified themselves as small shareholders.
"In a couple years I will be really rich or really broke. I chose to believe that free speech and Truth will win out in the end," said @snowblazer on Wednesday afternoon. "I have no plan to sell anytime soon. It's been a painful rollercoaster of a ride but my conviction is still strong!!"
Experts caution against the stock
The company on Wednesday also provided instructions to small shareholders on Wednesday about how to make short-selling of Trump Media shares more difficult.
Short selling is when investors bet a share will fall, and many small shareholders have blamed these bets as responsible for the company's poor performance since its trading debut.
Despite the latest share gains, professional investors cautioned the outlook was not good for Trump Media, putting some of the small investors who are holding onto the stock at risk.
"It's only a matter of time where they become disillusioned," says Julian Klymochko, CEO of Accelerate Financial Technologies.
Trump Media recently said it would be issuing additional shares. The company also said it would be launching live video streaming, which investors regarded as a risky and expensive bet. [Copyright 2024 NPR]
