On Tuesday, March 26, 2024, in New York, pedestrians were seen passing by the Nasdaq building. The company that operates the social media platform Truth Social, Trump Media, has taken over a spot on the Nasdaq stock exchange after replacing Digital World.
Following its merger with a blank-check acquisition company on March 26, Trump Media experienced a drastic drop in share value. Devin Nunes, CEO of Trump Media, communicated with Nasdaq Inc. on Thursday regarding potential illegal activity that may be causing the decrease in share price. In a letter to the exchange, Nunes outlined concerns about what he suspects to be “naked” short selling.
“Naked” short selling involves the sale of shares without actually owning or borrowing them, followed by an attempt to buy shares at a lower price in order to cover the sale. This practice is typically illegal and can benefit sophisticated market participants at the expense of retail investors.
The letter from Nunes was publicly disclosed in a filing with the Securities and Exchange Commission (SEC). He mentioned that the company’s shares were included on Nasdaq’s list of indicators of unlawful trading activity. Despite this concern for his company’s financial stability, Nunes did not receive immediate comments from representatives from Nasdaq or Trump Media.
Trump Media is majority-owned by former President Donald Trump and has faced financial challenges and lack of profitability since its merger with a blank-check acquisition company in March 2023. The company saw a slight increase in share value after the public disclosure of Nunes’ letter to Nasdaq but still faces significant financial obstacles due to its weak performance in 2023 and loss of $58 million with minimal revenue. Investors have been cautioned about trading Trump Media shares due to these challenges but hope for updates and additional context as this story continues to develop.
