Trump Media’s shares surged by more than 9% after the company requested House Republican committee leaders to investigate potential stock manipulation. The increase in stock value came after a deadline passed for former President Donald Trump, the majority owner, to become eligible for additional shares. The company’s CEO, Devin Nunes, asked the GOP chairs to probe alleged anomalous trading and determine if any laws were violated. Nunes claimed that Trump Media was a victim of “naked” short selling, a practice where shares are sold without borrowing them first.
The letter was addressed to four House committee leaders: Financial Services Chairman Patrick McHenry, Judiciary Chairman Jim Jordan, Ways and Means Chairman Jason Smith, and Oversight Chairman James Comer. Spokespeople for these chairmen did not immediately respond to CNBC’s requests for comment on Nunes’ letter. The probe is seen as necessary to protect the company’s shareholders and hold perpetrators of any illegal activity accountable. The ongoing feud with Citadel Securities, founded by GOP megadonor Ken Griffin, was also escalated in the letter, accusing the firm of engaging in unlawful trading activity related to DJT.
Trump Media made its trading debut on the Nasdaq on March 26 after completing a lengthy public merger. Despite initially seeing a high trading value of nearly $80 a share, the company’s stock price has since dropped significantly. The creation of the social media app Truth Social has added to the company’s market speculation, with analysts labeling Trump Media as a meme stock and a potential “scam” due to its lack of revenue and high market capitalization. The company’s shares have been described as expensive to short, leading to concerns of potential stock manipulation.
The letter from Nunes to Congress highlighted the critical need for an investigation into alleged unlawful trading activity surrounding Trump Media’s stock. More than 60% of DJT shares have been traded by just four market participants, including Citadel Securities, according to Nunes. The firm responded by criticizing Nunes as a “loser” and denying any involvement in illegal activities. Trump Media’s spokesperson fired back at Citadel Securities, accusing them of engaging in a range of offenses, including issues related to naked short selling, and prioritizing other corporations over everyday retail investors.
The ongoing conflict between Trump Media and Citadel Securities reflects broader concerns about stock market integrity and the potential impact of alleged stock manipulation on shareholders. The investigation requested by Nunes aims to shed light on the trading practices surrounding Trump Media’s shares and hold accountable any individuals or entities found to be engaging in illegal activities. As the company’s stock continues to face volatility in trading sessions, the outcome of the investigation could have significant implications for the future of Trump Media and its shareholders. The involvement of high-profile figures like former President Trump and major financial firms like Citadel Securities adds complexity to the situation and underscores the importance of maintaining transparency and fairness in stock market dealings.
