Shares of Trump Media & Technology Group rose over 3% on Friday after the company reached out to the Nasdaq exchange for assistance in preventing alleged market manipulation by “naked” short sellers. In a filing with the Securities and Exchange Commission, the company disclosed that it had written a letter to Nasdaq CEO Adena Friedman, alerting the exchange to the potential issue.
Trump Media shares have been highly volatile in recent days, hovering at nearly half their debut closing price. In the letter, Trump Media CEO Devin Nunes suggested that “naked” short-selling could be to blame for this volatility. Short selling involves borrowing a stock to sell it, anticipating a price drop, and repurchasing the shares at a lower price. However, “naked” short-selling, which is generally illegal in the United States, involves selling shares without borrowing them or determining their availability, creating the risk of not being able to deliver the shares.
Nunes cited reports that indicated Donald Trump’s company was the most expensive U.S. stock to short as of April 3. This suggests a significant financial incentive for brokers to lend non-existent shares. Additionally, he mentioned that DJT was on Nasdaq’s Reg SHO threshold list, which indicates securities that have failed to clear for five consecutive settlement days, potentially indicating naked short-selling or other issues.
It’s important to note that Nunes did not accuse any specific firms or individuals of engaging in naked short selling. However, he pointed out that four market participants, Citadel Securities, Virtu Americas, G1 Execution Services, and Jane Street Capital, have been responsible for over 60% of the extraordinary volume of DJT shares traded.
It remains to be seen how this situation will unfold and whether any evidence of market manipulation will be uncovered. The rise in Trump Media shares and the allegations surrounding potential market manipulation highlight the importance of transparency and fair trading practices in the financial markets. It will be interesting to see how the Nasdaq exchange responds to Trump Media’s request for assistance and whether any regulatory action will be taken to address these concerns.
We will keep you updated with the facts, on Fan Reviews News.
