On Tuesday, March 26, 2024, pedestrians were seen walking past the Nasdaq building in New York. The building previously belonged to Digital World but is now owned by Trump Media, the parent company of the social media platform Truth Social. Trump Media made its debut on the Nasdaq stock exchange on this day.
The company suspects illegal activity causing a decrease in the price of its shares and alerted Nasdaq Inc. The CEO of Trump Media, Devin Nunes, sent a letter to the exchange outlining what he believes to be “naked” short selling. This involves selling shares that the seller does not own or have not borrowed, which is generally considered illegal. This is distinct from legitimate short selling, where shares are borrowed before selling to benefit from share value declines.
In addition to this, Nunes mentioned in his letter that Trump Media’s shares were on a list by Nasdaq indicating unlawful trading activity. Despite being worth billions of dollars, Trump Media is facing financial struggles and needs cash. Experts caution investors to be cautious when trading the stock due to the lack of fundamentals backing its high valuation. In 2023, Trump Media reported a loss of $58 million and revenue of just $4.1 million.
Following the release of the letter, shares of Trump Media saw a slight increase on Friday. Both Nasdaq and Trump Media have yet to respond to requests for comment on the issue. However, this story is continually evolving with new developments and context emerging as more information becomes available about this ongoing investigation into potential securities fraud at Truth Social’s parent company.