Breaking News: Trump Media Suspects Illegal Activity

Introduction

New York
CNN
—

Trump Media, the parent company of the former president’s Truth Social, has alerted Nasdaq Inc. about suspected illegal activity impacting the company’s shares. This alarming discovery could potentially be linked to “naked” short selling, a practice considered illegal, as detailed in a letter written by Devin Nunes, CEO of Trump Media.

Suspicions about “Naked” Short Selling

In the letter submitted to the exchange, Devin Nunes indicated concerns over potential “naked” short selling, a technique where shares are sold without ownership or prior borrowing. Individuals or entities participating in this practice typically aim to buy shares at a reduced price to mitigate their positions. However, such activities are deemed illegal. In contrast, legitimate short sellers borrow shares before executing the sale.

Nunes stressed the importance of investigating this type of trading, as market participants taking advantage of “naked” short selling often profit at the expense of retail investors.

The concerning letter was made public through a filing with the Securities and Exchange Commission and indicated that shares of Trump Media were listed by Nasdaq as potentially engaging in unlawful trading activity.

Reactions and Stakeholders

Devin Nunes, the CEO of Trump Media, openly expressed his distress, raising questions about potentially sophisticated market manipulations that harm retail investors. Neither Nasdaq nor Trump Media have currently provided any comment on the matter.

Trump Media, predominantly owned by former President Donald Trump, currently faces a decline of around 50% from its all-time high, which occurred shortly after merging with a blank-check acquisition company and going public.

Challenges and Warning to Investors

Although still valued in the billions of dollars, Trump Media encounters financial difficulties and requires additional funds. Experts have cautioned investors to deliberate carefully before trading the company’s stocks due to concerns that their elevated valuation lacks the necessary fundamental support.

In 2023, Trump Media suffered losses amounting to $58 million, while only generating $4.1 million in revenue for the same year.

After the public release of the aforementioned letter, company shares experienced a slight increase in value.

Conclusion

Trump Media’s suspicions of illegal activity affecting its shares have raised significant concerns. The company’s concerns predominantly revolve around potential “naked” short selling practices that harm retail investors, a matter of interest that should be thoroughly investigated. In the face of financial challenges and fluctuating stock prices, Trump Media strives to maintain its market position.

Disclaimer: This story has been updated to include additional developments and context.