Devin Nunes, CEO of Trump Media, has intensified his call for legislative scrutiny into the short selling practices affecting the company's stock. Trump Media, holding a significant interest by former President Donald Trump, has been in the spotlight since its shares began trading publicly, sparking controversial debates over its valuation and stock movements.
On Wednesday, Nunes penned a pointed letter to the chairmen of several influential House committees, urging them to investigate eight financial firms he accused of potentially illegal short selling activities involving Trump Media's stock, DJT. These firms include Apex Clearing, Clear Street, Cobra Trading, Cowen and Company, Curvature Securities, StoneX Securities, TradePro, and Velocity Clearing. While Clear Street declined to comment, responses from other named firms are still pending.
Nunes argued that swift action is crucial "to protect retail shareholders, identify wrongdoers, and determine whether any laws including [Racketeer Influenced and Corrupt Organizations Act] statutes and tax evasion laws have been violated." His proactive stance comes after noting a substantial drop in DJT's share price, which he attributes to illegal naked short selling-a practice where sellers trade shares they have not borrowed and therefore do not own.
Since DJT started trading on March 26, its shares have seen a significant decline, which Nunes suggests is not a reflection of the company's financials but rather the result of manipulative trading practices. DJT shares were trading at $47.84 early Thursday, marking a 32% decrease from its opening price on March 26. Despite these challenges, Trump holds a substantial 65% stake in Trump Media, currently valued at over $5 billion, though he is barred from selling his shares until September due to merger agreement terms with a shell company that facilitated the public listing.
The situation has caught the attention of the broader financial community, with Nunes citing suspicious trading patterns and requesting that the Nasdaq Stock Market and the House investigate these activities for compliance with SEC rules. Moreover, he highlighted that DJT has consistently been on Nasdaq's Reg SHO Threshold List since April 2, 2024, indicating persistent settlement failures which might suggest wrongful trading activities.
In response to these allegations and in a move to safeguard shareholder interests, Nunes has also called for shareholders to lock their stocks from being used in short-selling trades. He aims to fortify Trump Media's position against what he perceives as a targeted attack that undermines both the company's market value and the integrity of its stock.
