Trump Media Declines 6% as Broad Selloff Weighs on High-Beta Stocks; Rumble Drops 8%
A broad selloff is hitting Trump Media and Rumble far harder than the rest of social media, and the reason comes down to what these stocks actually are beneath the surface.
Smaller, more volatile stocks are taking oversized losses, and two social media names are near the front of that group. Trump Media & Technology Group (NASDAQ:DJT) stock is down 6% to $6.94 in afternoon trading. Meanwhile, Rumble (NASDAQ:RUM) stock is down 8% to $5.66.
As a broad-market gauge, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 1.44%. That’s a selloff, but it’s a much softer decline than what’s happening with Trump Media stock or Rumble stock. Social media as a whole is holding up even better, with the Global X Social Media ETF (NASDAQ:SOCL) down 0.4%.
Thus, Trump Media and Rumble shares are falling harder than the SPY ETF. That gap opens when a broad selloff hits smaller, more volatile stocks.
High-Beta Names Take the Brunt of the Selloff
Each company sits in the communication services sector within the internet content and information industry. When risk appetite passes, smaller and more volatile stocks such as Trump Media and Rumble tend to amplify the broader market’s direction.
The Global X Social Media ETF holds both Trump Media and Rumble, though each is a small slice of its portfolio next to its much larger social media positions. Set against the steep drops in Trump Media stock and Rumble stock, the fund’s slim decline shows how focused the pressure is.
Trump Media’s Fusion Pivot Through TAE
Trump Media operates Truth Social, the Truth+ streaming service and the Truth.Fi financial brand, with Truth+ offering family-friendly live TV channels and on-demand content. Its lineup also includes Truth API, a business-to-business product that licenses access to public Truth Social posts. Rumble, by comparison, runs a video-sharing platform positioned as an alternative distribution channel for content creators.
In late September, Trump Media and TAE Technologies filed a registration statement for their all-stock merger. The deal would leave each side’s shareholders holding roughly equal portions of the combined company. TAE develops fusion energy, power management for AI computing and cancer therapy technology.
A large balance sheet of cash, digital assets, equity securities and short-term investments backs Trump Media, while its revenue remains minimal next to those holdings. Going forward, Trump Media’s legal expenses tied to legacy litigation are expected to fall significantly, since the company considers those matters substantially resolved. That mix helps explain why Trump Media stock swings hard when markets turn.
Weighing the Bull and Bear Case for Trump Media
Trump Media’s upside hinges on the TAE merger, which would push the company into fusion energy and power management for AI computing. Management views the combination as a strategic extension into energy security infrastructure.
Risk sits on the other side of the equation, and the bear case for Trump Media is the approvals the merger still needs from shareholders and regulators. Fusion development adds its own risk, since commercial fusion power isn’t proven yet and any setback at TAE could weigh on the combined company.
Rumble stock is slipping faster than Trump Media stock. Advertising, subscriptions, licensing and creator tipping make up Rumble’s main revenue sources, so its bull case rests on audience growth, while slowing audiences are the bear case.
Merger Approvals Hold the Key for Trump Media
Trump Media now faces a key question: whether the TAE merger passes its shareholder and regulatory approvals. Filed in late September, the registration statement marks the formal start of that approval process. Shareholders can watch for whether Rumble stock keeps tracking Trump Media stock once the broader selling eases.
A steep drop next to the near-flat Global X Social Media ETF shows how much extra volatility Trump Media stock and Rumble stock carry. Investors might consider keeping their position sizes modest until the TAE merger approvals resolve.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
