Trump Media & Technology Group, the parent company of Truth Social, asked Congress on Tuesday to investigate “potential manipulation” of its share price.
Trump Media CEO Devin Nunes voiced concerns about “naked” short selling of the company’s stock in a letter to the Republican chairs of the House Judiciary, Oversight, Financial Services and Ways and Means committees.
“Naked” short selling, in which traders sell shares without first borrowing them, is illegal. Various exchanges, like Nasdaq, are required to publish lists of stocks that have unusually high failure rates — a potential indication of “naked” short selling.
Trump Media stock has appeared on Nasdaq’s threshold list every day since April 2, Nunes noted in the letter.
The Truth Social parent was also the “single most expensive stock to short in U.S. markets” as of April 3, the CEO said, suggesting “brokers have a significant financial incentive to lend non-existent shares.”
“This is particularly troubling given that ‘naked’ short selling often entails sophisticated market participants profiting at the expense of retail investors,” Nunes wrote.
“Overall, we assess there are strong indications of unlawful manipulation of DJT stock,” he added.
In the letter to Congress, as well as an earlier letter to the chair and CEO of Nasdaq, Nunes emphasized that four companies have been responsible for more than 60 percent of “the extraordinary volume of DJT shares traded.”
One of those companies, Citadel Securities, came back swinging at the Trump Media CEO last week.
“Devin Nunes is the proverbial loser who tries to blame ‘naked short selling’ for his falling stock price,” a spokesperson for Citadel Securities said in a statement to CNBC.
Trump Media, in turn, criticized the capital markets firm for “bizarrely” targeting its CEO with an “unhinged attack.”
“Citadel Securities, a corporate behemoth that has been fined and censured for an incredibly wide range of offenses including issues related to naked short selling, and is world famous for screwing over everyday retail investors at the behest of other corporations, is the last company on earth that should lecture anyone on ‘integrity,’” the company said in a statement.
Trump Media had a strong stock market debut late last month, with its share price rising to $79 on its first day trading. However, the company’s stock value has since fallen significantly, hitting a low of about $23 per share last week. As of Wednesday morning, Trump Media’s shares hovered around $32.
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