The Trump Media & Technology Group (DJT) recently wrote a letter to Nasdaq CEO expressing concerns about potential market manipulation through the “naked” short selling of their stock. In the letter, Devin Nunes, CEO of Trump Media, highlighted the unfair practice of naked short selling and its potential disadvantage for retail investors.
Although not explicitly accusing anyone, Nunes mentioned that DJT is one of the most expensive U.S. stocks to short as of April 3, 2024. He raised concerns about brokers having a financial incentive to lend out shares they do not possess, potentially leading to market manipulation.
Furthermore, Nunes identified four market participants responsible for a significant portion of DJT trading volume, including Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital. He urged Nasdaq to take steps towards promoting transparency and compliance by requiring brokers to disclose their “Net Short” positions and preventing the lending of non-existent shares.
In response to the concerns raised by DJT, Nasdaq acknowledged that naked short selling can lead to market manipulation and promised to take steps towards promoting transparency and fairness in trading practices.