MW 'I'm sweating': I bought Trump's 'DJT' stock and I'm down 50%. What should I do now?

By Quentin Fottrell

'I'm not trying to be provocative or political'

Dear Quentin,

Do you have any thoughts on the Trump Media & Technology Group $(DJT)$? I am not asking a question about President Donald Trump, who co-founded the social-media group four years ago, and I'm not trying to be provocative or political by asking this question. This is a serious inquiry about the "DJT" stock. I'm down 50% and sweating! I'm not being a troll.

Investor

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Dear Investor,

I'll take you at your word.

The answer is in your question. It's hard for you to ask for advice about "DJT" because the stock is so highly politicized and, for that reason, it would be naive to believe that associations with Trump won't influence would-be investors and/or the share price. A stock will rise or fall based on emotion, expectations and momentum, as well as on fundamentals such as revenue and profit. "DJT" is down around 58% this year.

"DJT" was formed after a merger with Digital World Acquisition Corp., one of more than 1,000 special-purpose acquisition companies, or SPACs, that had IPOs since 2020. SPACs, also called "blank-check" companies, are basically shell companies that buy or merge with a private company so it can essentially be listed on the stock exchange. Then they must search for a company to bring public.

This allows a public listing to occur without it being subjected to the usual forensic examination of the IPO process. After the acquisition/merger, the SPAC changes its ticker symbol and name to that of the company it acquired. This process traditionally requires fewer disclosure agreements and regulatory hurdles; for that reason, it can attract younger, higher-risk investments.

Why, more to the point, did you purchase the stock?

People who bought the "DJT" stock expected it to rise, and in fact, after the company went public in March 2024, the stock price did soar to $233 from $10 in two days. After the November presidential election, it saw a brief bump. But social media is also a competitive business. The share price of Meta remains almost unchanged year to date, while "DJT" is down nearly 44%.

"DJT" fell by a further 5% Wednesday after the company made a filing with the Securities and Exchange Commission to permit a trust led by Trump to sell almost 115 million shares currently worth around $2.3 billion. The company said that it had no immediate plans to do that, but the filing was enough to rattle some investors, and the stock fell.

What, more to the point, do you think of Trump Media & Technology, which owns the social-media site Truth Social? Why did you purchase the stock? Did you think that Trump's election as president would help boost the number of Truth Social users? Did you believe it would take market share from Elon Musk's X or Meta's Facebook, the biggest social network in the world?

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Investing in an individual stock

This is a volatile and highly speculative stock. Because the company is not currently profitable, its share price is based on future earnings - and on the belief among a large share of those who buy or hold the shares, that the company will eventually become profitable. It had a trailing 12 months loss of $3.97 per share and a market capitalization of $4.47 billion. That's just for context.

And now for my response to a question you did not ask. Investors such as yourself take a big risk when they buy individual stocks. The S&P 500 SPX is down 3.7% year to date, in part due to the uncertainty surrounding Trump's latest round of tariffs, which he officially announced on April 2. Investors are nervous about the broader geopolitical ramifications of his tariff policies.

You're playing with fire by investing in one company. The megacap tech stocks known as the Magnificent Seven have had quite a run over the last decade. These stocks - Apple $(AAPL)$, Microsoft $(MSFT)$, Alphabet $(GOOGL)$, Amazon $(AMZN)$, Meta $(META)$, Tesla $(TSLA)$ and Nvidia - exploded during the tech 2.0 and, more recently, artificial intelligence booms, but they just ended their worst month and quarter on record.

You are playing with fire by investing in one company.

As I told this investor who purchased Nvidia's $(NVDA)$ stock several years ago because he liked its videogame graphics cards, there's a fine line between genius and luck. Even he admitted that he got lucky, though he may have been brushed by genius, too. A diversified portfolio should include small-cap, large-cap and non-U.S. stocks, plus cash and bonds.

In addition, as the CFA Institute warns: Beware of the fine - or "blurred" - line between investing and gambling. That relates not to a specific individual stock but to the purchase of any individual stocks. "Of course, there is no such thing as a guaranteed investment," it says. What goes up often comes down, as any bull or bear will tell you.

"But professional investors rely on a combination of knowledge, experience and discipline to take calculated risks," it adds. "They are seeking returns, not thrills from the remote chance of a big win. And that is very different from rolling the dice." Those may sound like harsh words when you are down 50% from your investment, but they are offered to you without prejudice.

The future of "DJT" is impossible to predict.

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You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

The Moneyist regrets he cannot reply to questions individually.

More columns from Quentin Fottrell:

Will Trump's policies lead to a recession? I'm 62 and earn $50,000 a year. How should I invest $100,000?

'She has been telling him lies': My sister convinced my father to sign everything over to her. What can I do?

My father died, leaving everything to my 90-year-old stepmother. Do I have a right to ask her if I'm in her will?

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-Quentin Fottrell

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April 04, 2025 09:28 ET (13:28 GMT)

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