Trump Media CEO Devin Nunes sent a letter to Nasdaq on Tuesday calling on them to do more to monitor what he claims is rampant illegal short selling against the company’s stock, which trades under $DJT.
According to Nunes’ letter, he suspects that the company’s stock might be subject to so-called “naked” short selling.
Short sellers, which Nunes and $DJT investors have decried for months as committed to seeing the company fail, essentially place a bet against a company that their stock price will go down. They do that by borrowing a stock from a broker, selling it on the market, and hoping that when they do have to finally buy the stock outright from the broker they’re borrowing it from, it’ll work out to be cheaper than what they initially sold their borrowed stock for.
Short selling is completely legal, and investors have made hundreds of millions of dollars betting against Trump Media stock, despite high fees associated with the risky trading method.
But Nunes, Trump Media, and their supporters have waged a media campaign against the short sellers since the stock went public, claiming that the short sellers have been using an illegal method known as naked short selling. Naked short sellers never actually officially borrow the stock before selling it on the open market. Because they never actually have the stock in hand, the seller can’t deliver the stock at the end of the transaction because he never properly owned it in any way.
Trades that go in that direction are classified as “failures to deliver” (FTD).
According to Nunes’ latest letter, SEC data for the first half of May shows that FTDs for $DJT exceeded one million shares on seven out of ten days, and two million shares on three of those days.
Because of that pattern, which could show stock manipulation, Nunes reiterated a call for Nasdaq to cooperate with a potential congressional investigation into the allegations.
He also called on big financial firms like Citadel Securities, Jane Street Capital, UBS, and Velocity Clearing, among others, to provide the Financial Industry Regulatory Authority with electronic blue sheets, which are records of their trading data.
Trump Media has been particularly aggressive in its public messaging against short sellers, pitching the contest as a battle between Trump’s enemies, the short sellers, and his supporters, many of whom have bought the stock as a personal investment in the president.
But not everybody online is happy with the steps Nunes has taken in recent months, as well as the trajectory of the stock, which is hovering around $46 a share.
“When is TMTG going to start and pump Truth Social,” asked @PeteG in the $DJT group on Truth Social, Trump Media’s flagship social media platform. They complained that Trump hadn’t mentioned the stock in a long time and that Nunes was doing nothing but “sending letters to the oblivion.”
“We really need a strong Catalyst, even the idea of forward progress might be enough to get the ball rolling,” they continued. “People have put up quite a bit of income to get us to this point just to watch these short scumbags hold our heads just ever so slightly under water. We just need a solid F U uppercut to the jaw and its lights out.”
But other posters encouraged doubters to just hold tight.
“We hear you, it can be frustrating. I see a huge mouse trap being set…” theorized @hughster. “Patience is our virtue… Trump/Devin/Swider and others…. It will be epic IMHO.”
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