As if 2024 couldn’t get any more bizarre, President Joe Biden announced on Sunday he was withdrawing from the presidential campaign. He subsequently endorsed Vice President Kamala Harris to become the Democratic nominee. Coming just a week after the assassination attempt on former President Donald Trump’s life, the election season gets roiled more every day. Investors in social media stock Trump Media & Technology Group (NASDAQ:DJT) may find August the perfect time to buy shares of Trump Media stock.
We’ll find out if the Democrat party unites behind Harris or if they will have an open convention. The vice president is seen by many to be the weaker candidate but as she ticks off many of the boxes important to the party’s politics there may not be the will to oppose her. Yet there are some Democrats like Congresswoman Alexandria Ocasio-Cortez saying they will not simply accept a coronation.
An open convention, on the other hand, could create severe intraparty division. With the Democratic National Committee scheduled to hold its convention Aug. 19 through Aug. 22, the whole campaign could take even stranger turns. Trump is already using Trump Media’s Truth Social platform to mock the developments so whether Harris is given a clear path to the nomination or chaos erupts, August could be an excellent to to buy Trump Media stock.
A Campaign in Turmoil
Following Biden’s disastrous debate performance in June calls quickly mounted for him to step aside from the campaign and let someone else run against Trump. Although he was steadfast in his commitment to being the nominee, his subsequent interview performances, while not necessarily poor did nothing to allay the fear that he had the rigor to beat Trump.
The assassin tried to kill Trump and there seemed little to stand in the way of his victory. Particularly with the iconic photo of him exhorting his followers to fight while raising his fist as blood streaked his face, the urgency to replace Biden as the candidate intensified.
While Biden’s last public comments were that he was in the race to stay, by Sunday he was apparently convinced to drop out. He announced his decision via a tweet on X, which itself was a curious way to do it.
And though he initially thanked his vice president for her work over the past few years, he didn’t endorse her. It was only in a follow-up tweet that he did so.
A Volatile Business and Stock
Like many meme stocks, Trump Media & Technology doesn’t always trade on fundamentals. A lot has to do with what is happening with the former president himself and his proclamations on Truth Social.
If Trump Media stock was solely based on the business, it likely wouldn’t have doubled in value this year, though it is down from the $50 per share price it began trading at in late March. Its business does not match up to other social media platforms like X, Facebook, Instagram or even Snapchat.
Engagement on the platform is low and it has far fewer members than its rivals. And because of the polarizing nature of the ex-president, it likely remains limited in who it attracts.
That means Trump Media & Technology is and will be a volatile stock.
Trump Media Stock: Not a Long-Term Holding
Normally I wouldn’t recommend investing in a stock like DJT. In fact, in April, I suggested investors avoid Trump Media stock. I also don’t believe in short-term investing. I’m a long-term buy-and-hold investor.
But the exception proves the rule. In this unique situation, I believe potentially significant short-term gains could occur from buying Trump Media stock. The drama about to unfold, Donald Trump’s response to it, and his social media platform’s heightened visibility during this period indicate August could be the time to buy shares.
I wouldn’t commit a lot of money to it and I wouldn’t make Trump Media stock a long-term holding. But this could be the rule-breaker that underscores the larger point.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.