Elon Musk is giving Trump Media stock a big boost this Monday.
Trump Media & Technology Group (DJT 11.46%) stock is posting big gains in Monday’s trading. The social media company’s share price was up 12.2% as of 2:30 p.m. ET. Earlier in the daily session, the stock had been up as much as 19.3%.
Trump Media stock is gaining ground today following an appearance made by Tesla CEO Elon Musk at a campaign rally held by former president and current presidential candidate Donald Trump. Musk’s appearance at Trump’s campaign rally appears to be giving Trump Media some meme stock momentum.
Trump Media stock is jumping thanks to Musk
Trump Media stock has often made moves in conjunction with shifts in perception about Donald Trump’s chances of winning this year’s presidential election. The company’s share price has also frequently made moves depending on shifts in its popularity as a meme stock. With Musk making an appearance at a Trump campaign rally in Butler, Pennsylvania, over the weekend. The rally marked Trump’s return to the site of an assassination attempt made against him in July.
During the appearance at the campaign rally, Musk jumped up and down onstage in a show of support for Trump. Images and videos of Musk jumping have been circulating as memes online and are likely boosting interest in Trump Media as a meme stock capable of delivering substantial short-term gains. In addition to being Tesla’s CEO, Musk also leads X, the platform formerly known as Twitter. Notably, X is the largest competitor to Truth Social — the social media platform that is currently the centerpiece of Trump Media’s business.
What comes next for Trump Media stock?
While it’s possible that Trump Media stock will continue to post gains corresponding with meme-stock energy or perceptions about Trump’s chances of winning in November, investors should keep in mind that the business’s outlook is still highly uncertain. The company recorded sales of just $828,000 and posted a net loss of roughly $16.4 million in the second quarter. Trump Media ended the second quarter with $344 million in cash and equivalents and zero debt and currently has a market capitalization of roughly $3.7 billion.
Trump Media has announced that it has landed TV streaming deals, but Truth Social remains the core of the business and has been monetizing at low levels. With the company’s growth strategy still largely unclear and the stock trading at at sky-high price-to-sales multiples, shares continue to look very risky based on the business’s fundamentals.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
