In a letter to Nasdaq Inc., Trump Media, the parent company of former President Donald Trump’s Truth Social, expressed concerns about potential illegal activity. CEO Devin Nunes believes that there may be “naked” short selling driving down the price of its shares. This practice involves selling shares that one does not own or has not borrowed in an attempt to buy them back at a lower price. While this is generally legal compared to legitimate short selling, where shares are borrowed before being sold, Nunes emphasized that it is still illegal.
Nunes highlighted that Trump Media’s shares were included in a list maintained by Nasdaq indicating potential unlawful trading activity. He expressed particular concern about sophisticated market participants profiting at the expense of retail investors. However, representatives from Nasdaq and Trump Media have yet to respond to requests for comment.
Trump Media’s value has decreased by approximately 50% since reaching an all-time high in March, despite being worth billions. The company requires additional funding and experts have cautioned investors about trading the stock due to its lack of financial stability to support its high valuation. Despite these challenges, shares of Trump Media slightly increased after the letter addressing potential illegal activity was released. The company reported a loss of $58 million in 2023 and only generated $4.1 million in revenue. The story has been updated with additional developments and context.