Trump Media & Technology Group (NASDAQ:DJT) stock is rising today under its new trading symbol, DJT. In a clear attempt to remind everyone who the company is controlled by, Donald J. Trump’s newly merged company is enjoying its first official trading day. DJT stock is the result of a long, complicated saga during which time the blank-check partner of Truth Social’s parent company attempted to delay the merger as legal problems piled up for the former president.
Last week, shareholders voted to approve the merger and the Nasdaq hasn’t wasted much time delisting the former “DWAC” ticker and replacing it with the new one that bares Trump’s initials. However, simply being tied to Trump likely won’t be enough to ensure long-term success. In fact, it is more likely to prove detrimental.
DJT Stock: What to Expect
Most newly-minted stocks surge on their first day of trading. By that logic, it’s not at all surprising that DJT stock rose as markets opened. After this initial growth spurt, though, the momentum appears to have subsided. As of this writing, shares are up only 42% after surpassing 50% this morning, and their current trajectory suggests that further decline is likely.
Investors considering a play on DJT stock should be more concerned about its long-term growth potential. That’s where there is a significant cause for concern. The company’s success or failure is almost entirely dependent on Trump and as of now, his future looks highly uncertain. InvestorPlace has spoken to multiple experts who see being tied to Trump as a substantial risk.
Anyone who thinks that being the Republican nominee for president will be enough to save him should take a look at the bigger picture. Trump’s legal problems are increasing, leading to significant fines he may not be able to pay. Selling his DJT stock holdings may not be the quick fix he needs either. The shares are subject to a six-month lockup period where executives are banned from selling. As the New York Times reports, these financial problems could end up hurting his campaign. If Trump doesn’t win in November, it will very likely tank DJT stock, as the company has no other catalysts to keep it elevated.
What Comes Next
It’s possible that election momentum may help spur some slight growth for DJT stock, at least in the short term. But as always, meme stock energy isn’t a reason to bet on a stock. If anyone thinks that betting on Trump is a good idea, they should consider his line of non-fungible token (NFT) trading cards that plummeted in value soon after their release.
NFTs may not be relevant anymore but the lesson in Trump’s failed foray into that market is important. If history is any indication, DJT stock will follow a similar pattern, even as the election draws closer. Wall Street hates uncertainty and when a company rises and falls with Trump’s fortunes, uncertainty will always be high.
On the date of publication, Samuel O’Brient did not hold (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.
