Trump Media & Technology Group has requested lawmakers to investigate potential manipulation of its stock, which trades under the ticker DJT, with the same initials as former President Donald Trump. The company’s CEO, Devin Nunes, a former Republican congressman, asked House committees to open an investigation into anomalous trading of DJT. Nunes has previously alleged that the media company’s stock has been targeted by unscrupulous investors since going public in late March, and has requested Nasdaq’s help in looking into possible incidents of “naked” short selling, which is banned in the U.S. because it involves shorting a stock without borrowing the shares first.
Trump Media shares have experienced significant volatility since going public last month. After reaching a high of $79.38 on its first day of trading, the stock plummeted to as low as $22.55 on April 16 before recovering to $33.95 in Wednesday afternoon trading. Naked short selling, the practice of selling shares without borrowing them first, can lead to large stock price declines and undermine market confidence. Nunes has highlighted data showing that four companies have been responsible for 60% of the extraordinary volume of DJT shares traded, including Wall Street firms like Citadel Securities and Jane Street Capital.
Trump Media, which owns the social media platform Truth Social, has drawn comparisons to meme stocks like GameStop, which attract individual investors based on social media buzz rather than traditional investment metrics. Nunes believes an investigation into naked short selling of DJT’s shares is necessary to protect shareholders, including retail investors, and to potentially uncover the need for policy changes. He suggested requiring brokers to better document their efforts to locate and borrow stock, as well as imposing stiffer penalties for illegal naked short sellers. Overall, it is clear that Trump Media is concerned about potential market manipulation and is seeking legislative support to address these issues.
Aimee Picchi, the associate managing editor for CBS MoneyWatch, has covered business and personal finance for various national news outlets. She highlights the involvement of prominent Wall Street trading firms like Citadel Securities and Jane Street Capital in the trading of DJT shares, as well as the need for transparency and accountability in the stock market. Trump Media’s request for a congressional investigation reflects broader concerns about market integrity and the protection of investors’ interests. By shedding light on potential manipulation and proposing regulatory changes, the company aims to ensure a fair and orderly market for all participants.
In conclusion, the request by Trump Media & Technology Group for a congressional investigation into potential stock manipulation highlights the challenges faced by newly public companies navigating a volatile market environment. As the company’s shares continue to experience significant fluctuations, there is a need for increased oversight and regulatory measures to safeguard investors and maintain market stability. By drawing attention to the issue of naked short selling and the involvement of major Wall Street firms in DJT trading, Trump Media CEO Devin Nunes is advocating for greater transparency and accountability in the market. Ultimately, congressional action may be necessary to address these concerns and protect the interests of all stakeholders involved.
