Trump Media, the parent company of Truth Social, founded by former President Donald Trump, has raised concerns about potential illegal activities impacting its stock price on the Nasdaq exchange. CEO Devin Nunes expressed suspicions of “naked” short selling, a practice where shares are sold without ownership or borrowing, leading to potential market manipulation. The company believes this activity has contributed to a significant decline in its share value, prompting it to alert Nasdaq Inc. and file a public letter with the Securities and Exchange Commission.
Despite being down approximately 50% from its all-time high, Trump Media continues to face challenges with its stock performance since going public through a blank-check acquisition. The company, primarily owned by Donald Trump, has struggled financially, with losses in the millions in the previous year. With experts warning investors about the lack of fundamentals supporting its valuation, Trump Media’s stock remains volatile, reacting to external factors such as the recent allegations of unlawful trading activity. Although the stock showed a slight increase following the public disclosure of the letter, uncertainties persist about the company’s financial stability and market reputation.
The ongoing saga involving Trump Media and Truth Social highlights the complexities of navigating the stock market, particularly for companies with controversial ties and limited financial success. As Trump Media battles allegations of market manipulation and struggles to generate profits, investors are advised to exercise caution when trading its shares. The company’s efforts to address concerns about illegal trading activities underscore the challenges it faces in maintaining shareholder trust and financial viability in a competitive and unpredictable market environment.