Trump Media & Technology Group Shares Surge Amid Naked Short Selling Concerns
Introduction
Trump Media & Technology Group (DJT) saw a significant surge in its shares, climbing over 9% on Friday. The company, which is the parent organization of former President Donald Trump’s Truth Social site, issued a warning regarding potential illegal “naked” short selling activities impacting its stock. CEO Devin Nunez penned a letter to Nasdaq CEO Adena Friedman, highlighting data that pointed to four firms being responsible for more than 60% of the extraordinary volume of DJT shares traded.
Concerns Over Market Manipulation
Nunez expressed concerns about potential market manipulation of the stock, citing data that revealed the involvement of Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital in the trading activity. He referenced a report from April 3 that labeled Trump Media & Technology Group’s stock as the most expensive to short, indicating a significant financial incentive for brokers to lend non-existent shares.
In his communication with Friedman, Nunez sought guidance on steps that could be taken to safeguard the interests of retail investors by preventing the lending of shares that do not actually exist. The company’s stock had experienced a turbulent journey since its debut on March 26, reaching an all-time high before plummeting to a record low earlier in the week.
Response from Market Participants
Citadel Securities responded to Nunez’s claims by accusing him of attributing the decline in the stock price to naked short selling. Despite the backlash, Trump Media took proactive measures by providing instructions to long-term shareholders on how to prevent the lending of their shares for short selling purposes.
Stock Performance and Market Reaction
Following the announcement of concerns related to naked short selling, Trump Media & Technology Group shares closed 9.6% higher at $36.38. The stock’s performance has been volatile, with fluctuations from an all-time high to an all-time low before experiencing a recent rally in the last three trading sessions.
Conclusion
The surge in Trump Media & Technology Group shares following concerns about potential naked short selling activities underscores the importance of market transparency and regulatory oversight. As the company continues to navigate these challenges, investors and stakeholders will closely monitor developments in the stock’s performance and any regulatory actions taken to address market manipulation concerns.
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