Trump Media warns Nasdaq short sellers of potential market manipulation in DJT shares

Trump Media & Technology Group, trading under the ticker DJT, has raised concerns about potential market manipulation on the Nasdaq exchange. The company alleges that some traders are engaging in “naked” short selling, a practice that is effectively banned in the U.S. This comes after a tumultuous period for Trump Media’s stock, which lost two-thirds of its value since going public last month.

Despite the recent 28% increase in Trump Media’s stock, CEO Devin Nunes has expressed concerns about brokers lending non-existent shares for short selling. Nunes wrote to the Nasdaq CEO requesting transparency and compliance to prevent naked short selling. The stock rose 9.6% to $36.38 on Friday, but concerns remain about the impact of short selling on its value.

Short selling involves borrowing shares of a stock to sell on the market, with the goal of buying them back at a lower price. However, “naked” short selling skips the borrowing step, leading to potential market disruptions and undermining investor confidence.

Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, noted a shortage of stock available for short selling against Trump Media shares. While there has been increased short selling and covering, it’s difficult to determine if naked short selling is occurring based on public data.

Nasdaq has emphasized its commitment to transparency and integrity in all markets, stating support for regulations against naked short selling. The Securities and Exchange Commission and FINRA are among the agencies that regulate short selling practices to maintain market stability.