Trump Media Stock (DJT) - Downtrend At Critical Level

Core Viewpoint - The current downtrend in Trump Media stock appears more serious than previous selloffs, with the stock returning to its pre-merger low of approximately $17.50, indicating a potential long-term issue rather than a temporary decline [2][7]. Group 1: Stock Performance and Historical Context - Trump Media stock has experienced significant volatility, trading well above its fundamental valuations due to President Trump's majority ownership and its status as a high-priced "meme" stock [3][7]. - Previous declines were short-term, driven by specific events such as the end of lockup periods and market reactions to tariff announcements, which were followed by recoveries as investors returned [4][5][6]. Group 2: Current Challenges - The current decline is attributed to negative developments that suggest a longer-term impact, making the stock's high valuation more fragile [7]. - There is a notable lack of business growth, with revenues remaining under $4 million for the twelve months ending March 31, and a high price/sales ratio of 1000x, indicating significant risk [8]. - Operating expenses have risen to $130 million for the same period, necessitating a 3500% increase in revenues to offset current expense levels [8]. - Management's focus on cash balance growth has been misleading, as cash has primarily been raised through the sale of over 20 million new shares, increasing the total shares outstanding by 10% to 220 million [9][10].