Nothing is straightforward when it comes to Donald Trump, and the volatility that seems to constantly surround the 45th president appears to extend into all facets of his life.
A prime example is Trump Media & Technology Group (NASDAQ:DJT), a publicly traded company bearing his name and initials and the entity behind the development of the social media platform Truth Social. DJT’s roller-coaster ride on Wall Street positions it among the most volatile stocks in the market.
This week, DJT took a hit following the release of its first-ever quarterly report, as paltry revenues combined with large losses sent investors running for the exits.
Indeed, revenues of $770,000 did not come close to offsetting the operating loss of $12.1 million. Nevertheless, the company has $234 million in cash available to continue absorbing losses for quite some time.
More concerning for some investors was the reluctance of DJT to share metrics that would allow for a black-and-white assessment of the company’s prospects. Unlike other social media platforms, the company decided not to disclose fairly standard KPIs such as signups, revenue per user, active accounts, or monthly and daily active users.
The company justified this approach by reasoning that publishing these figures would divert attention onto these short-term numbers at the cost of long-term strategy.
While admitting that this argument may have some merit, Jonathan Weber, a 5-star investor rated in the top 2% of TipRanks’ stock pros, believes that an unwillingness to be transparent is a worrisome sign.
“I believe that it would still be very fair for the company to disclose these metrics,” Weber opined. “The fact that these metrics are not available for shareholders to evaluate is a negative… Since DJT does not disclose its user count performance, it is difficult to evaluate how attractive the platform is for users.”
While it is true that the stock has surged 65% in value since mid-April, Weber chalks this up to “short squeezes, meme-fueled buying sprees” that are disconnected to the fundamental value of the security.
Though not discounting the potential for the stock to jump up again in the near term, Weber believes this would be due to speculation rather than long-term investment.
“From a fundamental point of view, I think Trump Media & Technology Group Corp. is not an attractive investment right here, which is why I am staying away from the company,” Weber concludes.
To this end, the investor has issued a Hold rating on DJT shares. (To watch Weber’s track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
