Trump Media, a company owned by former President Donald Trump, has reported potential illegal activity to Nasdaq Inc. CEO Devin Nunes suspects that there may be “naked” short selling driving down the price of its shares. This practice involves selling shares one does not own or borrow in an attempt to buy them back at a lower price. Nunes emphasized that this practice is generally illegal compared to legitimate short selling where shares are borrowed before being sold.
The letter detailing these concerns was submitted to Nasdaq and made public in a filing with the Securities and Exchange Commission. Trump Media’s shares were included in a list maintained by Nasdaq indicating potential unlawful trading activity. Nunes expressed particular concern about sophisticated market participants profiting at the expense of retail investors.
Representatives from Nasdaq and Trump Media have not yet responded to requests for comment. The company has seen its value decrease by approximately 50% since reaching an all-time high in March, despite still being worth billions. Experts have cautioned investors about 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 letter addressing potential illegal activity was released. In 2023, the company reported a loss of $58 million and only generated $4.1 million in revenue. The story has been updated with additional developments and context.