Trump Media, the company behind the former president’s Truth Social, has raised concerns about suspected illegal activity driving down its share price. In a letter to Nasdaq Inc., CEO Devin Nunes expressed concerns about “naked” short selling, a practice where shares are sold without being owned or borrowed, often leading to attempts to buy shares at a reduced price to cover the seller.
The letter also highlighted that Trump Media’s shares were on a Nasdaq list indicating potential unlawful trading activity. Nunes expressed concern that such activities could disadvantage retail investors while benefiting sophisticated market participants. Neither Nasdaq nor Trump Media have responded to requests for comment.
Despite being majority-owned by former President Donald Trump, Trump Media has seen its share value decline by around 50% since its all-time high set on March 26 after merging with a blank-check acquisition company to go public. Despite still being worth billions of dollars, the company is struggling financially and needs cash. Experts have cautioned investors to be careful when trading the stock due to the lack of fundamentals supporting its high valuation, noting that Trump Media lost $58 million in 2023 and generated just $4.1 million in revenue.
Shares of the company experienced slight gains after the letter’s publication, but the situation remains fluid and subject to further developments.
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