Trump Media, the company behind “Truth Social,” has raised concerns with Nasdaq regarding possible illegal activity impacting its share prices. CEO Devin Nunes penned a letter to the exchange outlining what he perceives as “naked” short selling, a practice where shares are sold without proper borrowing or assurance of borrowability.
The letter highlights the significant drop in Trump Media’s stock, which has plummeted by approximately 50% from its peak on March 26th, just after its initial public offering. Nunes alleges that this decline may be attributed to illegal market manipulation, specifically citing “naked” short selling as a potential factor.
“Naked” short selling is a controversial practice in which traders sell shares without owning them or securing them through borrowing, violating standard market protocols. This practice can artificially drive down stock prices and lead to market volatility.
Nunes’s letter to Nasdaq signals the company’s intention to address what they perceive as market irregularities that are negatively impacting Trump Media’s stock performance. The exchange will likely conduct its own investigation into these allegations to determine if any illegal activities have indeed occurred.
The situation underscores the challenges faced by new companies entering the public market, particularly those associated with high-profile figures like former President Donald Trump. Market volatility and potential illegal activities can significantly impact investor confidence and stock performance.
Trump Media’s alert to Nasdaq reflects broader concerns within the financial community about market integrity and the need for robust regulatory oversight to ensure fair and transparent trading practices.
