California Rep. Devin Nunes, ranking member of the House Intelligence Committee, speaks during an impeachment hearing on Nov. 13, 2019, in Washington.
Andrew Harrer | Bloomberg | Getty Images
Shares of Trump media jumped more than 9% on Wednesday, just hours after the company said it was asking Republican committee chairmen in the House of Representatives to investigate possible “unlawful manipulation” of its shares.
The stock push also came a day after a deadline for former President Donald Trump, the company’s majority owner, to be eligible for an additional 36 million “earnout” shares. That stake was worth more than $1.3 billion at the share price at 3:25 p.m. ET.
It was unclear what triggered Trump Media’s sudden surge, which began the trading day down nearly 5% before turning positive later Wednesday morning.
The company’s CEO, Devin Nunes, called on Republican leaders in a letter Tuesday to investigate the stock’s “anomalous trading” to assess the extent of the alleged manipulation and “whether any laws were violated, including RICO laws and tax evasion laws.” became”.
The request doubles down on Nunes’ claim that Trump Media, which operates under the ticker symbol DJT, is an apparent victim of “naked” short selling, the practice of selling a company’s stock without first borrowing it for that purpose.
Trump Media, which began trading on the Nasdaq on March 26 after completing a lengthy public merger, was by far the most expensive U.S. stock to be shorted in early April.
Brokers therefore have “a significant financial incentive to lend non-existent stocks,” Nunes, himself a former chairman of the Republican Party in the House of Representatives, wrote in the letter.
The investigation is necessary to protect the company’s shareholders and ensure that “the perpetrators of illegal activities can be held accountable,” he wrote.
The CEO addressed the letter to four House committee chairs: Financial Services Chairman Patrick McHenry, R-N.C., Judiciary Chairman Jim Jordan, R-Ohio, Ways and Means Chairman Jason Smith, R-Mo. , and Supervisory Chairman James Comer, R-Ky.
Spokespeople for the four leaders did not immediately respond to CNBC’s request for comment on Nunes’ letter.
The letter comes as the share price of Trump Media, the developer of social media app Truth Social, continues to trend lower in volatile trading sessions.
DJT soared in its trading debut, reaching a high of nearly $80 a share, but has since lost more than half that value.
Trump Media has been described as a meme stock and a “fraud” by some analysts, who are quick to highlight the discrepancy between the company’s lack of revenue and its market cap of around $5 billion.
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DJT price for the last month
Nunes’ letter also escalates a feud with Citadel Securities, the capital markets firm founded by Republican megadonor Ken Griffin.
Nunes referred to Citadel Securities in an April 18 letter to Nasdaq CEO Adena Friedman, warning that DJT “appears on Nasdaq’s ‘Reg SHO threshold list,’ indicating unlawful trading activity.” In the new letter, the he sent to Congress, he again referred to Citadel Securities.
The Reg or Regulation SHO List is designed to monitor short selling and identify potentially problematic failures in the delivery of securities to parties to a transaction. But “there are many legitimate reasons why broker-dealers may not deliver or deliver securities on the settlement date,” the SEC notes on its website.
Nunes told Friedman in his letter that more than 60% of DJT shares were traded by just four market participants, including Citadel Securities.
The company responded with a statement calling Nunes “the proverbial loser who is trying to blame his falling stock price on “naked short selling.”
“Nunes is exactly the kind of person Donald Trump would have shot [The] Apprentice,” a Citadel Securities spokesperson added in that statement Friday.
A Trump Media spokeswoman fired back: “Citadel Securities, a corporate giant that has been fined and punished for an incredibly wide range of offenses, including issues related to naked short selling, and is world-famous for fleecing everyday retail investors at the behest of.” “Cheating” other companies is the last company in the world that should lecture anyone about “integrity.”
A representative for Citadel Securities did not immediately respond to a request for comment.
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2024-04-24 20:11:52
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