On Tuesday, March 26, 2024, pedestrians strolled past the Nasdaq building in New York. The building, previously owned by Digital World, is now under the control of Trump Media, a social media platform owned by former President Donald Trump. On its debut on the Nasdaq stock exchange, Trump Media has raised concerns about illegal activity that may be causing a decline in share prices.
Devin Nunes, CEO of Trump Media, sent a letter to Nasdaq Inc., alleging “naked” short selling. This involves selling shares that have not been borrowed or owned beforehand, which is generally considered illegal. In contrast to legitimate short selling where shares are borrowed before being sold to profit from declining share values.
In his letter to the Securities and Exchange Commission (SEC), Nunes also mentioned that Trump Media’s shares were included on a list of unlawful trading activities by Nasdaq. Despite being worth billions of dollars, the company is facing financial struggles and requires cash infusions. Experts advise investors to exercise caution when trading this stock due to its lack of fundamental support for its high valuation. In 2023, Trump Media reported losses of $58 million and revenue of just $4.1 million.
Following the release of the letter on Friday, there was a slight increase in the company’s share prices. However, neither Nasdaq nor Trump Media responded to requests for comment on this issue as this story continues to evolve with new developments and context emerging.