Achi news desk-
New York
CNN
–
Trump Media, the parent company of the former president’s Truth Social, warned Nasdaq Inc. on Thursday of what the company suspects is illegal activity driving its share price down.
In a letter to the exchange, Devin Nunes, CEO of Trump Media (DJT), identified what he believes could be considered “bare” short selling.
Bare short selling means that someone sells shares that they do not own or have not borrowed. They will then often try to buy shares at a discount to insure themselves. This practice is generally illegal. While legitimate short sellers, people who seek to profit from falls in the value of a company’s shares, borrow the shares before selling.
The letter was published on Friday in a filing with the Securities and Exchange Commission.
Nunes also noted in the letter that the company’s shares are on a list that Nasdaq claims is “indicative of illegal trading activity.”
“This is particularly worrying given that “bare” short selling often results in sophisticated market participants benefiting at the expense of retail investors,” he said.
Representatives from Nasdaq and Trump Media did not immediately respond to requests for comment.
The company, which is majority owned by former President Donald Trump, is down about 50% from an all-time high it set on March 26, the day after it merged with a blank check acquisition firm to go public.
Company shares have been on a wild ride since then.
Although the company is still worth billions of dollars, it is struggling to make money and needs cash. Experts have warned investors to be careful if they choose to trade the stock, because the company lacks the fundamentals to support its sky-high valuation.
Trump Media lost $58 million in 2023 and made only $4.1 million in revenue.
The company’s shares ended Friday’s session about 9.6% higher.
This story has been updated with additional developments and context.
CNN’s Nicole Goodkind contributed to this report.
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