Trump Media Sends Notice To NASDAQ About Potential 'Market Manipulation' Of Its Stock
Trump Media And Technology Group sent a notice to the NASDAQ exchange warning that its stock — which trades under the ticker DJT — may be a victim of “potential market manipulation” due to short-selling activity.
The letter, which was sent Thursday to Nasdaq CEO Adena T. Friedman by Trump Media CEO Devin Nunes, claims that some traders are relying on “naked short selling,” which is when investors buy a stock without first borrowing shares. The practice is effectively banned in the United States, as regulators are tasked with making sure that trading firms are monitoring traders to ensure that they have the securities on hand in order to complete a short sale.
“I write to bring your attention to potential market manipulation of the stock of Trump Media & Technology Group Corp. (‘TMTG’), which operates the Truth Social platform and has traded on the Nasdaq Stock Market under the ticker ‘DJT’ since March 26, 2024,” reads the letter.
Nunes went on to note that “DJT appears on Nasdaq’s ‘Reg SHO threshold list,’1 which is indicative of unlawful trading activity.”
“This is particularly troubling given that ‘naked’ short selling often entails sophisticated market participants profiting at the expense of retail investors,” Nunes wrote.
The letter continued, “Reports indicate that, as of April 3, 2024, DJT was “by far’ ‘the most expensive U.S. stock to short,’ meaning that brokers have a significant financial incentive to lend non-existent shares.2 Data made available to us indicate that just four market participants have been responsible for over 60% of the extraordinary volume of DJT shares traded.”
The letter then listed four financial firms, including Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital.
“In light of the foregoing, and Nasdaq’s obligation and commitment to protect the interests of retail investors,3 please advise what steps you can take to foster transparency and compliance by ensuring market makers are adhering to Reg SHO, requiring brokers to disclose their ‘Net Short’ positions, and preventing the lending of shares that do not exist,” Nunes wrote. “TMTG looks forward to assisting your efforts.”