New York, NY – The shares of Donald Trump’s media and technology company experienced a notable rise of over 3% on Friday following a request made to the Nasdaq exchange regarding alleged market manipulation by “naked” short sellers. Trump Media & Technology Group reached out to Nasdaq CEO Adena Friedman to bring attention to what they described as potential market manipulation in the company’s stock, as disclosed in a filing with the Securities and Exchange Commission on Friday.
The highly volatile nature of Trump Media shares has been evident in recent days, with prices hovering around half of their debut closing price on March 26 of $57.99. CEO and former Congressman Devin Nunes attributed the fluctuations to “naked” short-selling, an illegal practice in the United States where shares are sold without being borrowed first, potentially leading to an inability to deliver the shares.
Despite not providing concrete evidence of naked short selling, Nunes pointed out that Trump Media’s stock was notably expensive to short as of April 3, 2024, potentially leading to brokers lending non-existent shares. Additionally, as of April 17, DJT was included in Nasdaq’s Reg SHO threshold list, which may indicate suspicious trading activity involving naked short-selling.
Although no specific entities were accused of naked short selling, Nunes highlighted that a few key market participants were responsible for a significant portion of the trading volume, including Citadel Securities, Virtu Americas, G1 Execution Services, and Jane Street Capital. In response, Citadel refuted the claims, emphasizing the importance of integrity in their market activities.
Nasdaq has yet to respond to requests for comment on the matter, but a spokesperson previously mentioned the exchange’s commitment to principles of liquidity, transparency, and integrity in all market operations. Transparency in short-selling practices has been an ongoing focus, with support for regulatory efforts aimed at monitoring and preventing naked short selling.
The situation surrounding Trump Media’s stock and the allegations of market manipulation continue to unfold, shedding light on the complexities and challenges within the financial markets. Investors and regulators alike will be closely monitoring developments to ensure the integrity and fairness of market activities moving forward.