Trump Media, the parent company of the former president’s Truth Social, has raised concerns about potential illegal activity to Nasdaq Inc. Specifically, 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, with the intention of buying them back at a lower price. Nunes emphasized that this practice is generally illegal compared to legitimate short selling, where shares are borrowed before being sold.
Trump Media’s shares were included in a list maintained by Nasdaq that indicated potential unlawful trading activity. Nunes expressed particular concern about sophisticated market participants profiting at the expense of retail investors. Representatives from Nasdaq and Trump Media have not yet responded to requests for comment. The company has seen its value decrease by approximately 50% since reaching an all-time high in March, despite being worth billions. 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.
