Trump Media & Technology Group fired another salvo in its war against short sellers who bet against Donald Trump’s namesake social media company.
Devin Nunes, CEO of Trump Mediaasked Nasdaq to cooperate in the investigation into alleged market manipulation of the company’s stock.
It seeks trading information from 13 financial companies and wants Nasdaq to “cooperate fully with any congressional or other investigations into these companies.”
“DJT shares are owned by more than 620,000 shareholders, the vast majority of whom are ordinary retail investors. A thorough investigation into DJT’s stock trading anomalies would help protect these shareholders from market manipulation and defend them against possible illegal practices by Wall Street insiders,” Nunes wrote in a letter to the Nasdaq CEO Adena Friedman.
Nunes first wrote to Friedman in April to alert the stock market of “potential market manipulation.” Nasdaq could not immediately be reached for comment.
One of the companies targeted by Nunes, Citadel Securities – run by Republican megadonor Ken Griffin – called Nunes a “losing” for blaming Trump Media’s losses on short selling.
Short sellers don’t actually own the shares, but borrow them and then sell them, betting that the shares will fall so they can buy the shares back at a lower price and keep the difference.
Trump Media has accused financial companies of engaging in naked short selling, which involves betting that a stock will fall without borrowing or owning the shares. Such a practice may be illegal.
Historically, short selling has been the scapegoat for companies facing market pressure.
“Nunes may be trying to distract from the fact that Trump Media management is struggling to grow revenue and become profitable,” said Jay Ritter, a finance researcher at the University of Florida. “Whether or not there is naked short selling, it is difficult to justify an $8 billion market cap for a struggling company with $4 million in annual revenue.”
Trump owns 65% of the shares of the app’s parent company Truth Social. THE stock transactions under the vanity DJT ticker.
Volatility has been the stock’s guiding principle since it began trading following the merger with shell company Digital World Acquisition Corp. in March. It swung dramatically from a high of $79.38 per share at the close of March 26 to its lowest closing level of $22.84 on April 16. It closed up 3% at $46.75 on Wednesday.
Trump Media’s market capitalization of $8 billion is based almost entirely on Trump brand and his loyal supporters, including small investors who showed him their support by backing the stock.
Trump Media reported a first-quarter net loss of $327.6 million on revenue of less than $1 million.
This article was originally published on USA TODAY: Trump Media wants investigation into allegations of ‘naked’ short selling
