Trump media shares gain as it alerts Nasdaq of ‘potential market manipulation’

(Reuters) – Shares of Donald Trump’s media and technology company were up more than 3% on Friday after it asked the Nasdaq exchange to help prevent “naked” short-selling in its shares.

Trump Media & Technology Group has alerted the CEO of Nasdaq of “potential market manipulation” in its shares, it disclosed in a filing with the Securities and Exchange Commission.

“Reports indicate that, as of April 3, 2024, DJT was ‘by far’ the most expensive U.S. stock to short”, meaning that brokers have a significant financial incentive to lend non-existent shares,” TMTG CEO Devin Nunes said in the filing.

“Data made available to us indicate that just four market participants have been responsible for over 60% of the extraordinary volume of DJT shares traded: Citadel Securities, Virtu Americas, G1 Execution Services and Jane Street Capital.”

A spokesperson for market maker Citadel said Nunes was trying “to blame ‘naked short selling’ for his falling stock price,” adding that integrity was central to everything Citadel does.

Virtu Americas, G1 Execution Services and Jane Street Capital did not immediately respond to Reuters requests for comments.

The news comes amid high levels of volatility with the Trump Media’s shares after its strong debut trading session on the Nasdaq last month.

The Nasdaq did not immediately respond to a Reuters request for comment.

A Nasdaq spokesperson told CNBC, “Nasdaq is committed to the principles of liquidity, transparency, and integrity in all our markets.”

“We have long been an advocate of transparency in short-selling and have been an active supporter of the SEC’s rules and enforcement efforts designed to monitor and prohibit naked short-selling,” the spokesperson said.

Naked short-selling of stocks refers to a practice in which an investor short sells shares without first borrowing them or determining they can be borrowed.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)