Why Trump Media Stock Is Rising Today

Trump Media & Technology Group (DJT 11.02%) Stocks post big gains in Monday’s trading. The social media company’s stock price is up 12.2% as of 2:30 PM ET. At the start of the daily session, shares rose as much as 19.3%.

Trump Media shares are gaining ground today following an appearance by adze CEO Elon Musk at a campaign rally held by former president and current presidential candidate Donald Trump. Musk’s appearance at Trump’s campaign rally appears to give Trump Media a meme-stock boost.

Trump Media shares rise thanks to Musk

Trump Media stocks have often made moves in conjunction with changes in perceptions of Donald Trump’s chances of winning this year’s presidential election. The company’s stock price also made frequent moves based on changes in its popularity as a meme stock. With Musk making an appearance at a Trump campaign rally in Butler, Pennsylvania over the weekend. The rally marked Trump’s return to the site of an assassination attempt against him in July.

During the appearance at the campaign rally, Musk jumped up and down on stage in a show of support for Trump. Images and videos of Musk jumping have circulated as memes online and are likely fueling interest in Trump Media as a meme stock capable of delivering substantial short-term gains. In addition to being the CEO of Tesla, Musk also runs X, the platform formerly known as Twitter. In particular, X is the biggest competitor to Truth Social — the social media platform that is currently the centerpiece of the Trump Media business.

What’s Next for Trump Media Stock?

While Trump Media stock may continue to post gains on meme-stock energy or perceptions of Trump’s chances of winning in November, investors should keep in mind that the outlook for the business is still very uncertain. The company posted sales of just $828,000 and posted a net loss of about $16.4 million in the second quarter. Trump Media ended the second quarter with $344 million in cash and cash equivalents and zero debt and currently has a market capitalization of about $3.7 billion.

Trump Media announced that it has acquired streaming TV deals, but Truth Social remains the core business and monetized at low levels. With the company’s growth strategy still largely unclear and the stock trading at a skyrocketing price-to-sales multiple, the stock continues to look very risky based on business fundamentals.