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Last night, millions of Americans got the update they’d been waiting for when former President Donald Trump’s mugshot went viral. The now-iconic photo from Georgia’s Fulton County Jail is dominating the airwaves.
You could say that Trump is making history. This is the first time that a former U.S. president has been indicted on criminal charges. It’s currently impossible to open a news site or aggregator and not see multiple stories on the Trump mugshot. It would also be hard to miss coverage of Trump’s decision to skip the election cycle’s first GOP debate.
At first glance, it might be tempting to assume that conservative media stocks are surging today. But that’s far from true.
To see why, we need look no further than Fox (NASDAQ:FOX). Often the leader of its peer group, FOX stock is struggling today, as it has been all week.
Why would a leading conservative news network be falling on a week that has been packed with important political stories? This question is definitely worth a closer look.
Trump Can’t Save FOX Stock. No One Can.
It’s no secret that Fox News and Trump have been closely linked since before he took office in 2016. In fact, in 2019, Vox reported that Trump couldn’t have won without the “Fox effect.” With that in mind, it makes sense that some investors would have had high hopes for FOX stock as the U.S. gears up for another election season. But shares have been trending downward all week, despite both Trump’s mugshot release and the first Republican debate, which Trump opted to skip.
This hasn’t been a good week for the Trump trades in general. A few weeks ago, I reported that if Trump’s legal problems continued, it would spell the end for Digital World (NASDAQ:DWAC). The experts I spoke to confirmed my bearish thesis on DWAC stock and its performance this week has only helped support it. The blank-check partner of Truth Social is still down 10% for the month and nearly 50% over the past year.
Fox Corp is also helping illustrate my point. The company turned many heads in April 2023 when it cut ties with polarizing anchor Tucker Carlson. This news pushed FOX stock down and it hasn’t recovered since. And the network’s problems can be traced even further back. Forbes reports that cable news audiences have been shrinking this year, adding that Fox’s prime-time audiences have fallen by almost one-third. Additionally, the company reported fairly discouraging earnings for Q4, due in part to its legal settlement with Dominion Voting Systems. Per The Hollywood Reporter:
“In broadcast, the decline was due to lower political advertising revenues, which were offset by higher revenues at the free streaming service Tubi. At cable, the impact was ‘primarily due to the continued impact of elevated supply in the direct response marketplace’ at Fox News. Fox News ousted its 8 p.m. host Tucker Carlson in the quarter, resulting in a ratings decline in that hour (however, the company said that more than 40 new advertisers joined the hour after his departure).”
The Bottom Line
Some investors might have harbored hope that Trump’s reelection campaign could help breathe new life in the struggling network, thereby saving FOX stock. But as the dust settles from this week, it’s clear that he can’t, nor can anyone else. When Trump opted to skip the GOP debate, he inadvertently hammered the last nail into the company’s coffin. As the Washington Post reported, this week’s debate ratings fell short of those from 2016.
Without both Trump and Carlson, Fox is likely to continue gradually bleeding views while its ratings fall alongside its share prices.
Much like DWAC, FOX stock needs Trump’s momentum to grow during an election cycle. Without it, the company faces a grim economic landscape, regardless of Trump’s legal fate.
On the date of publication, Samuel O’Brient did not have (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.