Donald Trump
Trump Media & Technology Group has escalated its battle against short sellers betting against Donald Trump’s social media company.
Devin Nunes, CEO of Trump Media, has urged Nasdaq to assist in probing alleged market manipulation of the company’s shares.
He has requested trading data from 13 financial firms and urged Nasdaq to “fully cooperate with any and all congressional or other investigations into these firms.”
“DJT stock is held by more than 620,000 shareholders, the majority of whom are everyday retail investors. A comprehensive inquiry into DJT stock trading anomalies would safeguard these shareholders from potential market manipulations and protect them against any illegal practices by Wall Street insiders,” Nunes wrote in a letter to Nasdaq CEO Adena Friedman.
Nunes initially contacted Friedman in April to highlight “potential market manipulation.” Nasdaq was unavailable for immediate comment.
Citadel Securities, one of the firms Nunes is targeting, led by Republican megadonor Ken Griffin, labeled Nunes a “loser” for attributing Trump Media’s losses to short selling.
Short sellers do not own the shares but borrow and sell them, anticipating a decline to repurchase them at a lower price and pocket the difference.
Trump Media has accused financial firms of conducting naked short sales, which involve betting on a stock’s decline without borrowing or owning the shares, potentially constituting illegal activity.
Historically, short selling has been scapegoated by companies facing market pressure.
“Nunes may be attempting to divert attention from Trump Media’s struggles to grow revenue and achieve profitability,” said Jay Ritter, a finance scholar at the University of Florida. “Whether naked short selling is occurring or not, justifying an $8 billion market cap for a struggling firm with $4 million in annual revenue is challenging.”
Trump owns 65% of the shares in the parent company of the Truth Social app, traded under the vanity DJT ticker.
Since its debut after merging with shell company Digital World Acquisition Corp. in March, the stock has experienced significant volatility. It surged from a high of $79.38 per share at the end of March 26 to a low of $22.84 on April 16. On Wednesday, it closed up 3% at $46.75.
Trump Media’s $8 billion market cap is largely attributed to the Trump brand and his devoted following, including small investors who have bolstered the stock.
Despite this, Trump Media reported a first-quarter net loss of $327.6 million on revenue of less than $1 million.
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