Trump Media, the parent company of former President Donald Trump’s Truth Social, has raised concerns with Nasdaq Inc. over potential illegal activity related to short selling. 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 borrow in an attempt to buy them back at a lower price.
Nunes emphasized that this is generally illegal compared to legitimate short selling, where shares are borrowed before being sold. The letter detailing these concerns was submitted to Nasdaq and made public in a filing with the Securities and Exchange Commission (SEC). Trump Media’s shares were included on Nasdaq’s list of potential unlawful trading activity, which has had detrimental effects on retail investors.
Representatives from both Nasdaq and Trump Media have yet to respond to requests for comment. The company, which is mainly owned by former President Donald Trump, has seen its value decrease by approximately 50% since reaching an all-time high in March. Despite this setback, shares of Trump Media slightly increased after the letter addressing potential illegal activity was released. In 2023, the company reported a loss of $58 million and generated only $4.1 million in revenue. Investors have been cautioned about trading the stock due to its lack of financial stability supporting its high valuation.
The story has been updated with additional developments and context.
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