Trump Media & Technology Group is concerned about illegal activity driving down its share price and has asked Congress to investigate the matter. The CEO of Truth Social owner Trump Media, Devin Nunes, wrote a letter to GOP Chairmen of various committees regarding potential manipulation of the company’s share price. Nunes believes there are strong indications of unlawful manipulation, including signs of “naked” short selling, in which shares are sold without ownership or borrowing.
However, experts are skeptical about the claims of market manipulation. Some believe that short sellers are betting against Trump Media because the stock is overvalued and likely to fall in price. Trump Media recently reported a $58 million loss in 2023 with very little revenue, leading to an extremely high price-to-sales ratio when compared to other social media companies. Since reaching a peak of $66 in late March, Trump Media’s share price has declined by more than half.
Trump Media’s letter to Congress pointed out that just four market participants are responsible for over 60% of the company’s trading volume. This includes Citadel Securities, Virtu Americas, G1 Execution Services, and Jane Street Capital. However, some experts note that Citadel and Jane Street are active market makers in many stocks traded in America, casting doubt on the accusation of manipulation. Citadel, founded by Republican billionaire donor Ken Griffin, dismissed Trump Media’s claims, calling Nunes a “proverbial loser” and denying any involvement in market manipulation.
Last week, Nunes also wrote a letter to Nasdaq, where Trump Media shares trade, raising concerns about market manipulation. This letter also mentioned Citadel, leading to further tensions between the two entities. Trump Media’s allegations have not been substantiated, and experts question the validity of the claims. The company’s declining share price and financial performance are likely key factors driving short selling and investor sentiment. The situation remains contentious, with both sides presenting conflicting narratives about the reasons behind the stock’s decline.
Despite Trump Media’s efforts to address concerns of market manipulation and request a Congressional investigation, the issue remains unresolved. The company faces challenges in maintaining investor confidence and restoring its share price to previous levels. The involvement of key market participants, including Citadel, adds complexity to the situation. As the story continues to develop, it raises questions about the dynamics of stock trading, the influence of market makers, and the impact of political affiliations on financial markets.
