The newly publicly-traded shares of Trump Media have plummeted over 50% in just two weeks, signaling the beginning of what could be a significant downtrend. The conversion of Trump Media into a publicly-traded company has brought about new regulations and oversight, giving investors access to detailed information about the company’s operations, results, and finances. However, the picture is looking grim for former Digital Acquisition shareholders who have been negatively impacted by the merger.
Many shareholders have yet to grasp the extent of the problems revealed by formal SEC filings, but they are about to become more aware as articles detailing Trump Media’s weaknesses and negative merger effects begin to circulate. Wall Street is showing interest in shorting the stock based on factual valuation, which oftentimes contrasts with emotional excitement surrounding a company’s stock price.
Trump Media adds to the growing list of SPAC merger disappointments, with many companies facing significant drops in share prices post-merger. While the “Trump” name may attract excitement for a while, this effect is expected to diminish over time, especially as Donald Trump may move on to other ventures and potentially sell his shares in the company. Trump Media’s failure to sustain its breakthrough of $50 and current trading just above $35 suggests a potential further decline in the stock price.
Investors are advised to keep emotions in check when investing, as enthusiastic optimism can lead to poor investment decisions. It is important to pay attention to relevant price barriers, like the $50 and $35 levels, as they can signal potential trends in the stock price. Ultimately, the warning is clear: relying on emotions rather than facts can lead to significant losses in the market.
