The parent company of Truth Social, Trump Media & Technology Group, asked Congress to investigate potential manipulation of its share price on Tuesday.
Devin Nunes, the CEO of Trump Media, expressed worries about the illegal practice of 'naked' short selling of the company’s stock in a letter to the Republican chairs of the House Judiciary, Oversight, Financial Services and Ways and Means committees.
Selling shares without borrowing them first, known as 'naked' short selling, is against the law. Certain exchanges, like Nasdaq, are mandated to publish lists of stocks that show unusually high failure rates, which could indicate 'naked' short selling.
Nunes pointed out in the letter that Trump Media stock has been listed on Nasdaq’s threshold list every day since April 2.
The CEO also highlighted that the Truth Social parent company was the most expensive stock to short in the US markets as of April 3, indicating that brokers have a significant financial motivation to lend non-existent shares.
Nunes wrote that the issue is especially concerning because 'naked' short selling often involves sophisticated market players profiting at the expense of retail investors.
He added, “Overall, we assess there are strong indications of unlawful manipulation of DJT stock.”
In the letter to Congress and an earlier letter to the chair and CEO of Nasdaq, Nunes emphasized that four companies were responsible for more than 60 percent of the extraordinary volume of DJT shares traded.
One of those companies, Citadel Securities, reacted to the accusations made by the Trump Media CEO last week.
Citadel Securities responded to the Trump Media CEO's claims in a statement to CNBC, dismissing the allegations as a loser's attempt to blame 'naked short selling' for the falling stock price. Trump Media, in return, criticized Citadel Securities for targeting its CEO with an 'unhinged attack.'.
The company issued a statement criticizing Citadel Securities, a corporate giant that has been fined and censured for various offenses, including issues related to naked short selling, and accused it of mistreating everyday retail investors at the behest of other corporations.
Trump Media had a strong start in the stock market last month, with its share price reaching $79 on its first day of trading. However, the company's stock value has since dropped significantly, reaching a low of about $23 per share last week. As of Wednesday morning, Trump Media’s shares were around $32.
Trump Media & Technology Group, the parent company of Truth Social, asked Congress on Tuesday to investigate “potential manipulation” of its share price. Trump Media CEO Devin Nunes voiced concerns about “naked” short selling of the company’s stock in a letter to the Republican chairs of the House Judiciary, Oversight, Financial Services and Ways and…
