- DJT shares lost more than 18% on Monday.
- Trump Media intends to sell another 21.5 million DJT shares to funds from operations.
- US retail sales were too high for the market to expect a drop in interest rates.
- Israel continues its saber rattling against Iran's attack over the weekend.
Trump Media & Technology Group (DJT)the social media platform owned by former president and current presidential candidate Donald Trump, sank precipitously on Monday in a sign that retail sentiment regarding the meme stock may be short-lived.
DJT shares plunged 18.4% on Monday to $26.61 before losing nearly 3% more after the session and trading below $26. Tensions in the Middle East between Israel and Iran, coupled with stronger-than-expected retail sales data, sharply dampened sentiment. As US Treasury yields continued to rise, the NASDAQ plunged 1.8% and the S&P 500 lost 1.2%.
Trump Media News
The instigating news was that Trump Media has filed paperwork to sell up to 21.5 million new shares of common stock, which would greatly dilute existing shareholders.
Additionally, more than 146 million shares of common stock will soon be able to trade on the open market. Many of these shares consist of warrants that existed before Trump Media's merger with the investment vehicle Digital World Acquisition Corp (DWAC) several weeks ago. This is causing DJT stock to drop as most observers think insiders will cash in on the stock as soon as they can. Trump himself needs funds to meet his current legal bills.
Trump Media runs the former president's social media hub, Truth Social, but the platform only brought in several million dollars in all of 2023. The bullish idea behind this stock is that the platform will gain many more users as the 2024 presidential campaign ramps up. heat up this summer between current President Joe Biden and Trump.
Against the backdrop of Monday's discontent over DJT's liquidity event, stocks continued to trade lower on Israel's provocative statements that its aggression with Iran was not over. Several officials vowed to respond to Iran's drone and missile attack over the weekend, which in turn was a response to Israel's earlier bombing of an Iranian consulate in Syria.
The rise in US retail sales in March also worried some central bank watchers, as it was further evidence that the economy is too strong for the Federal Reserve (Fed) to start cutting interest rates. interest this summer.
Trump Media Stock Forecast
Trump Media shares directly broke the $32 support level inadvertently on Monday. This was somewhat surprising as the bulls rushed in on Friday night to help DJT close above $32 by the end of the session.
The Relative Strength Index (RSI) is reading 35, so momentum has really thrown in the towel on this one. However, some bulls could begin to make themselves heard soon. If DJT can consolidate for a while above the mid-$20 area, then another onslaught at the $32 level is expected.
DJT daily stock chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
