Trump Media Alleges Naked Short Selling and Files Complaint with Nasdaq

Trump Media, the parent company of former President Donald Trump’s Truth Social, has filed a complaint with Nasdaq Inc. regarding potential illegal activity involving “naked” short selling. Devin Nunes, CEO of the company, suspects that this practice is driving down the price of its shares. In contrast to legitimate short selling, where shares are borrowed before being sold, naked short selling involves selling shares that one does not own or has not borrowed in an attempt to buy them back at a lower price.

Nunes emphasized that this practice is generally illegal and highlighted that Trump Media’s shares were included in a list maintained by Nasdaq indicating potential unlawful trading activity. The letter detailing these concerns was made public in a filing with the Securities and Exchange Commission. Given the negative impact on retail investors, Nunes expressed particular concern about sophisticated market participants profiting at their expense.

Nasdaq and Trump Media representatives have yet to respond to requests for comment. Since reaching an all-time high in March 2023, Trump Media’s value has decreased by approximately 50%. While still worth billions, the company is struggling financially and requires additional funding. 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.

Trump Media’s parent company filed a complaint with Nasdaq Inc., alleging potential illegal activity involving “naked” short selling by Devin Nunes, CEO of the company.

The accusation raised concerns among investors who feared it could lead to further decline in share prices.

Nunes stated that this practice was generally illegal compared to legitimate short selling where shares were borrowed before being sold.

In response to these claims, Nasdaq made public a letter detailing concerns about potential unlawful trading activity involving Trump Media’s shares.

While still worth billions, Trump Media faced significant financial difficulties and required additional funding from investors.

Experts advised caution when investing in the stock due to its lack of financial stability supporting its high valuation.

Despite these challenges, share prices slightly increased after the release of the letter addressing potential illegal activity.

Trump Media reported a loss of $58 million in 2023 and generated only $4.1 million in revenue.

The story has been updated with additional developments and context.