In a recent column published by Forbes, a financial analyst provided in-depth analysis and advice to investors on Trump Media & Technology Group stock. This company, known for owning Truth Social, has seen significant volatility in its share price following a concerning financial report.
The analyst suggests that investors who previously capitalized on the company’s shares could consider selling their shares to avoid potential losses due to an anticipated wave of panic selling. Trump Media & Technology Group’s financial problems became evident when a report revealed that the company was losing substantial amounts of money.
Despite these challenges, the share price experienced a brief period of stabilization, hovering just above $40, after previously reaching a high of $79.28. The fluctuation in share value, characterized by dramatic ups and downs, led analyst John S. Tobey to advise shareholders to consider selling their holdings. According to Tobey, the timing could be optimal to exit your investments, especially after a slight increase in stock value.
tobey analysis included a crucial detail about the company’s recent management moves, which could significantly affect the stock’s future. On April 15, Trump Media filed a Form S-1 with the SEC, beginning the process to register all shares of the newly merged company for sale. This filing triggered a series of regulatory reviews by the Securities and Exchange Commission (SEC), which could lead to SEC approval and subsequently trigger a large-scale stock sell-off by existing investors.
“Certainly don’t draw a trend line based on the stock’s eight-day rise. Many shareholders acquired their shares at low prices. Having waited through the ups and downs, they might prefer to take profits and move on,” he suggested. “Then there is the classic psychological trend reversal effect. With DJT banging $70 a month ago, and now around $40, above the low $20s, any weakening could encourage worry-based selling. (Especially if last week’s surge through the $35 barrier doesn’t hold.)
The analyst explained that this strategic presentation by Trump Media could be seen as a preemptive move to stabilize the company’s financial status by making more shares available for purchase. However, this could also lead to an increase in market supply, which could further depress the share price if demand does not keep pace. Investors who currently own stocks could face significant risks if they decide to remain invested during this volatile period.
“Successful investing means seeking shelter when the floodgates open. Waiting to see if the floods really come means being swept downstream,” she warned before adding, “Wall Street is full of successful investors who ‘sold too soon.’ After all, you can always buy back if the waters go down. Or, more likely, you just go in another direction where the sun shines on dry land.”
In conclusion, the analyst’s recommendation to sell shares of Trump Media & Technology Group is based on a detailed evaluation of the company’s financial health, the stock’s recent performance, and anticipated future events that could influence the stock market. This advice is intended to protect investors from potential financial losses that could result from continued instability and potential stock entry into the market following SEC approval.
