Trump Media Issues Warning to Nasdaq CEO Over Alleged Market Manipulation

By Thea Felicity

Apr 19, 2024 11:36 AM EDT

Evander Holyfield v Vitor Belfort
HOLLYWOOD, FLORIDA - SEPTEMBER 11: Former US President Donald Trump speaks after the fight between Evander Holyfield and Vitor Belfort during Evander Holyfield vs. Vitor Belfort presented by Triller at Seminole Hard Rock Hotel & Casino on September 11, 2021 in Hollywood, Florida.
(Photo : Douglas P. DeFelice/Getty Images)

Trump Media, spearheaded by CEO Devin Nunes, warns Nasdaq Stock Market CEO Adena Friedman about what they term 'potential market manipulation' of the company's DJT stock. 

According to CNBC, this warning follows the recent decline in the value of DJT shares since its initial public offering (IPO) last month, when the stock debuted at over $70 per share.

READ NEXT: Trump Media Investors Finally See Uptick in Their Shares for 2 Straight Days

Why Trump Media Warned Nasdaq CEO

Trump Media's concerns center around the "naked" short selling of shares, a tactic in which stocks are sold without first having borrowed them for that purpose, as reported by VCPost. 

Such actions can lead to downward pressure on stock prices, potentially harming shareholders, including former President Donald Trump, who owns nearly 60% of Trump Media shares. The paper value of his stake has reportedly dropped by billions of dollars since the company's public trading debut.

However, Nunes refrained from directly accusing any specific entity of naked short-selling. However, he pressed about the troubling indicators, including DJT's appearance on Nasdaq's 'Reg SHO threshold list,' which suggests potential unlawful trading activity. 

The Trump Media CEO also pointed to circumstantial evidence, such as DJT being one of the most expensive stocks to short in the United States during early April, which could incentivize brokers to lend non-existent shares for short-selling purposes.

Data analysis suggests that the short volume in DJT shares has remained relatively unchanged since early April, indicating a consistent pattern of short-selling activity.

The Trump Media CEO emphasized the gravity of the situation, noting that 'naked' short selling often involves sophisticated market participants profiting at the expense of retail investors. Nunes called upon Nasdaq to take proactive measures to foster transparency and compliance, urging the market regulator to ensure that market makers adhere to regulatory standards and prevent the lending of shares that do not exist.

In response to inquiries from media outlets, a Nasdaq spokesperson reiterated to CNBC the exchange's commitment to liquidity, transparency, and integrity in all its markets. The spokesperson also underlines Nasdaq's advocacy for transparency in short-selling and its support for regulatory efforts to monitor and prohibit naked short-selling practices.

READ MORE: Trump Media Provides Short-Selling Prevention Tips Following DJT Stock Price Decline

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