By Steve Dinnen
When it comes to equities, two companies stand out with their ties to the new government and the new president: Trump Media and Technology Group, and Tesla.
Trump Media, of course, is the social media platform whose major stockholder is its famous namesake. It launched its IPO just last March and has had a volatile 11 months since, trading as low as $11.75 and as high as $79.38. Its latest price was $30.39.
Trump Media is a proxy, if you will, for the fortunes of the president himself. In the days running up to the election, the shares soared. In the days since, they’ve snored.
The stock is massively overvalued. Its earnings report for 2024 showed a loss of $400 million. Revenue was $3.6 million, not quite what an average Whataburger store pulls in. The company closed out 2024 with $777 million, a huge pile of cash, and has announced plans to license financial services via Truth.FI and get into the bitcoin business.
Automaker Tesla has positive earnings, and its CEO, Elon Musk, is leading Trump’s efforts to downsize the federal government.
The company’s stock pickers saw an opportunity in Tesla due to this relationship, and within six weeks of the election its shares jumped 94%. Shares have backtracked a bit, but at $355.84, they’re still 157% higher than their yearly low. Some investors have ignored that much of the potential growth of Musk’s operations, such as rocket builder SpaceX and its satellite communications subsidiary, Starlink, have nothing to do with Tesla.
Tesla is an automaker, plain and simple — and handsomely valued, at that. Its current price-to-earnings ratio is 174, which is significantly higher than Ford (6.48) or Volkswagen (4).
