Recently, there has been a storm of negative issues surrounding Trump Media, including insider infighting over stockholdings, competing insider shareholder lawsuits, and first insiders wanting to sell. Trump Media CEO Nunes gave feeble responses to these issues in an interview with Fox Business News. Additionally, there is a still-open new million-share spigot from convertible securities and contracts that are converting, along with a highly diluting “bonus” 40 million share issuance if the stock remains above $17.50 for 20 of 30 days.
The culmination of these issues has resulted in an emotional rout, leading to a potential mass shareholder exodus. As the controlling shareholder, Donald Trump could ask his selected board members for permission to sell before the standard 6-month waiting period. It is advised to protect capital by selling now in anticipation of the coming sellers. The stock is deemed significantly overpriced, with a book value under $2, a price to sales ratio over 25x, a large negative profit margin, and a negative price/earnings ratio, which will only worsen with the addition of new shares.
When the first SEC-required quarterly report for Trump Media is released, the negative fundamentals will be evident. Wall Street analysts will weigh in on the situation, further solidifying the shift from rhetoric to fact. The key share price has already broken below the $35 barrier, indicating further troubles ahead. It is crucial to take action now and beat the coming sellers to the exit to minimize potential losses. The situation at Trump Media continues to deteriorate, and it is vital for shareholders to make informed decisions to protect their investments.
