In a recent development, the parent company of former President Donald Trump’s Truth Social, Trump Media, has raised concerns about potential illegal activity to Nasdaq Inc. Specifically, CEO Devin Nunes suspects that there may be “naked” short selling driving down the price of its shares. This practice involves selling shares without owning or borrowing them with the intention of buying them back at a lower price.
In a letter detailing these concerns, Nunes highlighted that Trump Media’s shares were included in a list maintained by Nasdaq indicating potential unlawful trading activity. The detrimental impact on retail investors was emphasized by Nunes, particularly concerning sophisticated market participants profiting at their expense.
The company and representatives from Nasdaq have yet to respond to requests for comment. Despite seeing its value decrease by approximately 50% since reaching an all-time high in March, Trump Media remains worth billions but is struggling financially and requires additional funding. Experts have advised investors to exercise caution when trading the stock due to its lack of financial stability supporting its high valuation.
Despite these challenges, shares of Trump Media slightly increased after the release of the letter addressing potential illegal activity. The company reported a loss of $58 million in 2023 and generated only $4.1 million in revenue. This story has been updated with additional developments and context.