DJT Shares Jump on TAE Technologies Deal as Retail Investors Call It ‘Old School Penny Stock’

Core Viewpoint - Trump Media & Technology Group announced a $6 billion all-stock merger with TAE Technologies, leading to a significant increase in its stock price, but retail investor sentiment has sharply declined, indicating skepticism about the merger's value and implications [1][2][3]. Financial Performance - Trump Media trades at an extremely high price-to-sales ratio of 797x, with trailing revenue of only $3.68 million and a net loss of $54.8 million [2][6]. - The company reported a negative EBITDA of $175.8 million and a year-over-year revenue decline of 3.8% [6]. Market Sentiment - Following the merger announcement, Reddit sentiment regarding Trump Media plummeted from 78 to 22 out of 100, reflecting a lack of confidence among retail investors [1][2]. - The prevailing sentiment on Reddit characterizes Trump Media as an "old school penny stock," with users expressing skepticism about the merger and the company's fundamentals [4][5]. Investor Concerns - Retail investors have raised concerns about the merger, questioning how a social media company with declining revenue could be valued at billions through a merger with a fusion energy company that has not yet produced commercial energy [5]. - Technical indicators suggest high volatility and overbought conditions for Trump Media's stock, further supporting the skepticism among investors [5].