Trump Media wants probe into stock manipulation
Trump Media & Technology Group has intensified its campaign against short sellers targeting Donald Trump’s social media company.
Devin Nunes, CEO of Trump Media, has called on Nasdaq to assist in investigating alleged market manipulation of the company’s shares. Nunes is seeking trading data from 13 financial firms and has urged Nasdaq to “fully cooperate with any and all congressional or other investigations into these firms.”
“DJT stock is held by over 620,000 shareholders, most of whom are everyday retail investors. A thorough investigation into the anomalies in DJT stock trading would help protect these shareholders from market manipulations and defend them against potential illegal practices by Wall Street insiders,” Nunes wrote in a letter to Nasdaq CEO Adena Friedman.
Nasdaq responded to USA TODAY, stating it was “committed to the principles of liquidity, transparency, and integrity in all our markets.” The exchange highlighted its advocacy for transparency in short selling and support for the SEC’s efforts to monitor and prohibit naked short selling.
Nunes initially contacted Friedman in April to alert her to “potential market manipulation.” Nasdaq could not be reached immediately for additional comments.
One of the firms targeted by Nunes, Citadel Securities, led by Republican megadonor Ken Griffin, dismissed Nunes’ allegations, calling him a “loser” for attributing Trump Media’s losses to short selling.
Short sellers typically borrow shares to sell them, betting the stock price will drop so they can repurchase the shares at a lower price and pocket the difference. Trump Media has accused financial firms of engaging in naked short selling, which involves betting against a stock without borrowing or owning the shares—a practice that can be illegal.
Historically, struggling companies have often blamed short sellers for their market difficulties.
“Nunes may be attempting to shift focus away from the management problems at Trump Media, which is facing challenges in increasing revenue and achieving profitability,” said Jay Ritter, a finance scholar at the University of Florida. “Regardless of whether naked short selling is happening, it is hard to justify an $8 billion market cap for a struggling firm with $4 million in annual revenue.”
Trump owns 65% of the shares in the parent company of the Truth Social app, with the stock trading under the vanity DJT ticker.
Since its merger with Digital World Acquisition Corp. in March, the stock has experienced significant volatility, swinging from a high of $79.38 per share on March 26 to a low of $22.84 on April 16. It closed up 3% at $46.75 on Wednesday.
Trump Media’s $8 billion market cap largely relies on the Trump brand and his dedicated following, including small-time investors supporting the stock. The company reported a first-quarter net loss of $327.6 million on less than $1 million in revenue.
