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Perhaps in a bid to secure Donald Trump’s performance award or to divert attention away from its poor fundamentals, Trump Media and Technology Group (NASDAQ: DJT) has remained laser-focused on the issue of “naked” short-selling of its shares over the past few days. Now, the embattled company has come up with a 3-step plan to combat what it sees as the artificial depression of its share price.
The Back and Forth Between Trump Media and Technology Group (DJT) and Citadel
On the 17th of April, Trump Media and Technology Group published a comprehensive list of FAQs to address investor concerns, including those related to short-selling. Specifically, the company advised its investors to contact their respective brokers to restrict their shares from being loaned out for short positions.
Then, on the 19th of April, Trump Media penned a letter to urge the Nasdaq exchange to probe the “naked” short-selling of its shares as well as its inclusion in the so-called threshold list. In the letter, the company identified four market-makers as the purported culprits behind the manipulation of its share price:
“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.”
This then prompted Citadel to issue a scathing rebuke against the CEO of Trump Media and Technology Group, Devin Nunes.
$DJT -4.45% premkt
❖ Ken Griffin’s Citadel calls Trump Media CEO a ‘loser’ after he wrote a letter to NASDAQ claiming to be a victim of potential market manipulation
Citadel hasn’t only dismissed the claims—it took aim directly at Nunes and branded him a “proverbial loser.”…
— *Walter Bloomberg (@DeItaone) April 22, 2024
In what is the crème de la crème of Citadel’s response, the firm noted:
Nunes is exactly the type of person Donald Trump would have fired on ‘The Apprentice.’
This statement then prompted a predictable backlash from Trump Media:
“Rather than support our common sense efforts to promote transparency and compliance, Citadel Securities bizarrely targeted our CEO with an unhinged attack.”
Trump Media went on to note:
Citadel Securities, a corporate behemoth that has been fined and censured for an incredibly wide range of offenses, including issues related to naked short selling, and is world famous for screwing over everyday retail investors at the behest of other corporations, is the last company on earth that should lecture anyone on ‘integrity.’
3-Step Plan to Combat Short-Sellers
This brings us to the crux of the matter. Trump Media and Technology Group has now published a 3-step plan for its investors to combat rampant short-selling. Specifically, the company wants its investors to:
- Hold their DJT shares in a cash account at their brokerage firm instead of a margin account.
- Opt out of any securities lending programs.
- Move their shares to a Direct Registration (DRS) account at the Company’s transfer agent, Odyssey Transfer & Trust Company.
Of course, as this drama continues, Donald Trump has apparently qualified for a significant performance award. Specifically, Trump is now eligible to receive DJT “earnout” shares worth around $1.3 billion after the company’s stock remained above the $17.50 price level for 20 trading days following its listing on the 26th of March.
Trump Media and Technology Group has experienced two distinct liquidation waves recently, with the first such wave precipitated by the company’s disclosure that its Truth Social platform raked in a paltry $4.131 million in revenue in the entire of 2023, incurring a net loss of over $58 million, and the second major downward leg prompted by a filing with the SEC for the issuance of 21.491 million shares upon the exercise of the company’s warrants.