Trump Media & Technology Group (TMTG) is doubling down on its claims of illegally traded stock, this time bringing its concerns to congressional leaders. In a letter dated Tuesday, TMTG CEO Devin Nunes requested a “thorough and expeditious investigation” into what the company claims is “unlawful manipulation” of its stock.
Nunes pointed to Trump Media’s appearance on the Nasdaq’s “Reg SHO threshold list” since April 2 as evidence of unlawful trading activity. The Reg SHO list includes securities whose transactions failed to clear at a registered clearing agency for five consecutive days. Nunes believes that the company’s stock is being manipulated through “naked” short-selling, which is the illegal sale of shares without borrowing them first. He noted that this type of activity can be particularly harmful to retail investors.
Nunes also requested that the investigation include requests for Consolidated Audit Trail trading data, Financial Industry Regulatory Authority (FINRA) data, Depository Trust and Clearing Corporation (DTCC) information, and reports from DTCC member firms reflecting total shares short since February 14.
According to Nunes, just four market participants are responsible for more than 60% of Trump Media’s trading volume: Citadel Securities, VIRTUAmericas, G1 Execution Services, and Jane Street Capital. Nunes believes that these entities are engaged in unlawful manipulation of the company’s stock.
In response to Nunes’ letter, a spokesperson for Citadel Securities dismissed the allegations as “the proverbial loser who tries to blame ‘naked short selling’ for his falling stock price.”
The controversy surrounding Trump Media’s stock began after the company went public on the Nasdaq under the ticker DJT on March 26. The company’s stock has been in a weeks-long free-fall following disclosures of multi-million dollar losses from operations in 2023, the registered resale of substantially all of its outstanding securities, and the announcement of its own live TV streaming platform. Despite the plunge in Trump Media’s stock value, its daily short volume has remained stable, suggesting that sales are coming from long-sellers rather than shorts.
Trump Media’s stock was up almost 8% on Wednesday afternoon, trading at $35.06 per share and bringing its market cap to $4.78 billion. The company’s market value has been in flux due to the ongoing controversy surrounding its stock.
The situation highlights the challenges faced by companies going public through special purpose acquisition companies (SPACs), which have become increasingly popular in recent years. SPACs allow companies to go public without the traditional IPO process, but they can also create complexities and uncertainties for investors.
In conclusion, Trump Media & Technology Group’s allegations of illegally traded stock have sparked a new controversy in the financial industry. The company’s claims of “naked” short-selling and unlawful manipulation of its stock have raised concerns about the integrity of the financial markets and the need for greater oversight and regulation. As the situation unfolds, it remains to be seen how congressional leaders will respond to TMTG’s requests for an investigation and what consequences, if any, may result for those found to be engaging in unlawful activity.