Nunes Alleges Unlawful Activity at Nasdaq, Trump Media Amid Financial Struggles

Devin Nunes, CEO of Trump Media, the parent company of former President Donald Trump’s Truth Social, has alerted Nasdaq Inc. of suspected illegal activity driving down the price of its shares. In a letter to the exchange, Nunes outlined concerns about what he believes to be “naked” short selling. This practice involves selling shares that are not owned or borrowed, often leading to attempts to buy shares at a reduced price to cover the seller. Legitimate short sellers, in contrast, borrow shares before selling to benefit from declines in share value.

The letter, made public in a filing with the Securities and Exchange Commission (SEC), also highlighted that the company’s shares were on a Nasdaq list indicating potential unlawful trading activity. Nunes expressed concern that such activities could disadvantage retail investors while benefiting sophisticated market participants. Nasdaq and Trump Media representatives have not yet responded to requests for comment.

Trump Media has seen its share value decline by around 50% since its all-time high set on March 26 after merging with a blank-check acquisition company to go public. Despite still being worth billions of dollars, the company is struggling financially and needs cash. Experts have cautioned investors to be cautious when trading the stock due to the lack of fundamentals supporting its high valuation, noting that Trump Media lost $58 million in 2023 and generated just $4.1 million in revenue.

Shares of the company experienced slight gains after the letter’s publication, but the situation remains fluid and subject to further developments.