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Trump Media stock rose slightly in extended trading after the company reported its first-ever profit. DJT climbed to $4.20, but it remains well below its all-time high as concerns about the company’s business persist.
Trump Media Stock Rose After Earnings
Truth Social’s parent company published an encouraging report on Monday. In a statement, the company said that it made a net income of $409.7 million in the third quarter, its biggest figure on record.
However, this profit did not come from an improvement of its core business. Instead, the surge was because of the change in value of its digital assets, which include its Bitcoin holdings. The company currently holds 12,062 coins, making it the tenth-largest corporate holder in the world. It owns more coins than other companies like Tesla, Block, and Galaxy Digital.
Bitcoin did well in the third quarter of the year as it jumped from below $58,000 to a peak of $87,300. In accounting, the company is required to update the realized and unrealized value of its assets on a mark-to-market basis. The adjusted EBITDA was a loss of $12.3 million, an improvement from $29 million in the same period last year.
The report also showed that the company’s revenue surged in the third quarter of the year. Revenue jumped to $3 million in the quarter, up by 205% from the same period last year. Most of this growth was driven by subscription services, including the Trump API. Trump API is a solution that allows customers to get access to posts from popular figures like President Trump earlier on. Revenue also came from its Truth+ service, which generated over $200k.
The report also showed that Trump Media ended the quarter with $2.5 billion in assets. Most of these assets are in the form of digital assets, most of which are in its Bitcoin holdings.
Trump Media Faces Potential Risks Ahead
Still, the company faces some major risks ahead. One of the main risks is that its profits are unrealized, meaning that they are at risk if Bitcoin continues falling. Indeed, data shows that Bitcoin has dropped into a technical correction after falling by over 14% from its highest point in October this year. As a result, the value of its Bitcoin holdings is declining, which may result in a loss in the fourth quarter if the trend continues.
The other key risk is that Truth Social’s traffic is falling, a move that will affect its core revenue over time. SimilarWeb data shows that the website’s traffic stood at 11.8 million in October, down by over 22.9% from the previous month. The revenue should have been strong because its traffic should have been strong of the midterm elections.
The other risk is that it will be investigated when Democrats take charge of the House and the Senate next year. One of the key issues is Truth+, which they claim is illegal.
DJT Stock Price Technical Analysis
The daily chart shows that the DJT share price has been in a strong sell-off and is now hovering at a record low. It has been in a steep sell-off and has moved below the important support level of $6.84, its lowest level in June and July.
The stock has remained below all moving averages, a sign that bears are in control. Therefore, the shares may continue falling in the near term. If this happens, the next level to watch will be at $3.50. On the other hand, a move above the $5 resistance level will invalidate the bearish outlook.
This article provides market information, not investment advice. Stocks and cryptocurrencies carry market, liquidity and operational risks. Readers should conduct independent research and consult qualified financial professionals before making investment decisions.
