Trump Media asks lawmakers to investigate "unlawful trading activity"

Trump Media & Technology Group is asking lawmakers to analyse what it claims is "potential manipulation" of its stock, which trades nether nan ticker DJT – nan aforesaid arsenic nan initials of erstwhile President Donald Trump. 

In an April 23 letter, Trump Media CEO Devin Nunes, a erstwhile Republican congressman from California, asked respective House committees to "open an investigation of anomalous trading of DJT." 

The committees Nunes asked to look into nan rumor are nan House Committee connected nan Judiciary; its Committee connected Financial Services; its Committee connected Ways and Means; and nan Committee connected Oversight and Reform. 

Nunes has antecedently alleged that nan media company's banal has been targeted by unscrupulous investors since it went nationalist successful precocious March. Earlier this month, he asked nan Nasdaq banal exchange, wherever DJT trades, for thief successful looking into imaginable incidents of "naked" short selling. That believe is banned successful nan U.S. because it involves shorting a banal without first borrowing nan shares, which tin destabilize prices. 

"'[N]aked' short trading often entails blase marketplace participants profiting astatine nan disbursal of unit investors," Nunes wrote successful his missive to House Republican committee leaders.

Trump Media shares person swung wildly since going nationalist past month. After surging to a precocious of $79.38 per stock connected March 26, its first time of trading, nan banal plunged to arsenic debased arsenic $22.55 per stock connected April 16. The shares person since regained ground, rising $1.38, aliases 4.2% to $33.95 successful Wednesday day trading.

What is naked short selling? 

Short trading occurs erstwhile investors get shares of a banal they judge will diminution successful price, and past waste those holdings connected nan marketplace for rate proceeds. If nan banal value tumbles, nan trader past purchases nan shares astatine nan little value and returns nan banal to nan trading patient from which they primitively borrowed nan shares. 

That enables nan traders to pouch nan quality betwixt nan borrowed banal value and nan waste price. Such trading is legal. But "naked" short trading skips nan measurement wherever nan trader borrows shares of nan stock, meaning that nan investor sells shares they don't own. Later, they bargain nan banal to screen their position. 

Naked shorting tin lead to ample declines successful a target company's banal price, and tin besides undermine marketplace confidence, according to rule patient Kohn, Kohn & Colapinto.

Wall Street trading firms

Nunes besides cited "data made disposable to us" that he said shows 4 companies person been responsible for 60% of nan "extraordinary measurement of DJT shares traded." 

The companies see well-known Wall Street firms, specified arsenic Citadel Securities, a market-making patient founded by billionaire Ken Griffin, and Jane Street Capital.

Neither Citadel nor Jane Street returned requests for comment, nor did nan different 2 firms cited by Nunes, VIRTU Americas and G1 Execution Services. 

Trump Media, whose main plus is nan societal media level Truth Social, has prompted comparisons with "meme" stocks like GameStop. These stocks typically pull individual investors based connected societal media buzz, alternatively than connected business fundamentals relied connected by organization investors, specified arsenic profitability and gross growth. 

Nunes wrote to nan lawmakers that he believes an investigation into naked short trading of DJT's shares is "needed to protect shareholders, including TMTG's unit investors."

He added, "It whitethorn besides shed ray connected nan request for argumentation changes" specified arsenic :requiring brokers to amended archive their efforts to find and get stock, and stiffening penalties for forbidden naked short sellers."

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