Trump Media Protests Against NASDAQ, Suspicious Short Selling

Devin Nunes Alleges Market Manipulation by Short Sellers

Devin Nunes, the CEO of Trump Media and Technology, made headlines by sending a formal letter to Nasdaq’s CEO, Adena Friedman, on Friday, April 19.
In the letter, Nunes claims that Trump Media may be targeted for market manipulation by at least 4 companies.

Nunes asserts that the social media company’s stock, traded under the ticker DJT, has been the subject of naked short selling, where investors bet that the stock will decrease in value.
Interestingly, the former president is the largest single shareholder of the company.

The Controversy Unfolds

Devin Nunes, a prominent figure as the former chairman of the House Intelligence Committee, gained national attention for his unwavering support of President Trump.
Representing the state of California, he aligned with the President’s stance 96.2% of the time and was often criticized for echoing Trump’s conspiracy theories.

In response to Nunes’ claims, Citadel stated to FOX Business, “Devin Nunes is the epitome of a sore loser trying to blame ‘naked short sellers’ for the drop in his stock price.
Nunes is precisely the kind of person Donald Trump would have fired on ‘The Apprentice’.
If he worked for Citadel Securities, we would fire him, as competence and integrity are at the core of everything we do.”

Understanding Short Selling

Short selling is an investment technique where an investor bets on a stock’s decline.
The investor borrows shares of a company, promising to return them within a specific timeframe.
These borrowed shares are then sold.
The investor later buys back the necessary number of shares to cover the position and pockets the difference if the new stock price is lower than when the shares were sold.
However, if the stock price rises, the investor must pay the difference between the two prices.

When a stock becomes popular to short, those lending the shares may impose a fee or charge commissions for the loan.
Shortly after Trump Media shares became available, they became the most expensive to short in America due to related transaction fees.

Naked short selling differs from regular short selling as the investor does not have access to shares to cover the volume that needs to be returned.
Naked short selling has been illegal in the United States since 2005 with the introduction of Regulation SHO.

Source: Money.com (Published on April 20, 2024, 00:20:53).
Original Title: Trump Media Letter to NASDAQ: 4 Naked Shorts!