Trump Media & Technology Group (DJT) shares have been highly volatile since the media company merged with special purpose acquisition company (SPAC) Digital World Acquisition in late March and Monday's price action is more of the same. Indeed, DJT stock is up roughly 30% midday following what investigators are calling an attempted assassination of former President Donald Trump over the weekend.
At a rally in Butler, Pennsylvania, on Saturday, Trump, who is the presumptive Republican nominee for the 2024 presidential election, survived an assassination attempt, though a bullet did strike his right ear, according to the Associated Press. Tragically, one rally-goer lost his life and two others were injured before the shooter was shot dead by the Secret Service, the report adds.
"We pray for the recovery of those who were wounded, and hold in our hearts the memory of the citizen who was so horribly killed," Trump said yesterday in a post on Truth Social – the social media platform operated by Trump Media & Technology Group. "In this moment, it is more important than ever that we stand United, and show our True Character as Americans, remaining Strong and Determined, and not allowing Evil to Win."
While there was no material change in the fundamentals of DJT stock following the incident over the weekend, shares are surging nonetheless.
Political violence presents a risk for the stock market
Given that it's been decades since the last assassination attempt on a president, this weekend's event creates unfamiliar terrain for the stock market, says Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management.
"Political violence is a risk for markets and we have seen volatility increase in the past few months in equity markets around the world given the elections in India and France," Landsberg adds. "Unfortunately, we will have to plan for increased volatility in both stock and bond markets as our election nears given the rancor we have seen."
Is DJT stock a buy, sell or hold?
As for DJT stock, many investors may be wondering if they should buy shares given Monday's big run higher. However, the truth of the matter is it still remains a risky proposition for investors.
For one, there's no analyst coverage on shares of Trump Media & Technology, at least as far S&P Global Market Intelligence is concerned. Analysts typically have access to research and information not readily available to retail investors, so having their insight is helpful when determining the best stocks to buy, as well as the worst.
Additionally, the company currently carries a market capitalization of nearly $8 billion despite producing just $770,500 in revenue and a net loss of $327.6 million in its most recent quarter.
As Interactive Brokers Chief Strategist Steve Sosnick said in a March 26 note, it's likely "political motivations driving the stock." He adds that if "one's investment decisions are based primarily upon emotions, then it is hardly a surprise that standard valuation metrics will be cast aside. True believers don't really care about prosaic concerns like price-to-earnings (P/E) ratios and the like. They're not doing detailed calculations about the discounted future cash flows of their favorite stocks."
So if you do decided to trade DJT stock, do so in a small amount that you can afford to lose.
