Trump Media (DJT) CEO Devin Nunes is calling on Republican lawmakers to investigate “possible manipulation” of DJT shares in response to what he calls “anomalous trading” in the stock.
“Since April 2, 2024, DJT has appeared on Nasdaq’s ‘Reg SHO Limit List’ every day, which is an indication of unlawful trading activity,” Nunes wrote in a letter to House GOP leaders on Monday. “This is particularly concerning because ‘naked’ short selling often results in experienced market participants profiting at the expense of retail investors.”
Short interest in DJT stock — betting that the stock price will fall rather than rise — is about 13% of shares outstanding, according to the latest data from S3 Partners. The company recently tried to ward off short sellers by advising investors on how to avoid having their shares lent out for short interest positions.
To “short” a stock, a trader must first borrow shares he already owns before he can sell them. A “naked” short sale is an illegal practice of shorting a stock that has not yet been borrowed.
“DJT was reportedly by far the most expensive stock shorted in U.S. markets as of April 3, 2024, meaning brokers have a significant financial incentive to lend non-existent shares,” Nunes’ letter said further.
Trump Media, the parent company of Truth Social, went public on the Nasdaq after being acquired late last month in a shareholder-approved deal with special purpose acquisition company Digital World Acquisition Corp. had merged. Shares, which rose more than 10% on Wednesday, have fallen about 50% since the end of March.
Nunes highlighted four market participants that accounted for more than 60% of the traded volume of DJT shares: Citadel Securities, VIRTU Americas, G1 Execution Services and Jane Street Capital.
The claims echo Nunes’ arguments in a separate letter sent April 18 to Nasdaq Chairman and CEO Adena Friedman.
Representatives for Citadel, VIRTU and Jane Street did not immediately respond to Yahoo Finance’s request for comment.
Citadel, the hedge fund founded by Ken Griffin, responded to Nunes’ claims in a fiery statement on April 18, writing: “Devin Nunes is the proverbial loser trying to blame ‘naked short selling’ for his falling stock price.”
“Nunes is exactly the kind of person Donald Trump would have fired over the Apprentice. If he had worked for Citadel Securities we would fire him as skills and integrity are at the heart of everything we do.”
Trump owns around 60% of Truth Social. At current levels of about $36 per share, Trump Media has a market cap of about $4.9 billion, giving the former president a stake of about $2.9 billion. Immediately after the company’s stock market debut, Trump’s stake was worth just over $4.5 billion.
On Tuesday, the stock reached a milestone that secured Trump an additional $1.2 billion
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and send her an email at [email protected].
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