This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Whether rightly or wrongly, Trump Media and Technology Group (NASDAQ: DJT) is convinced that its stock is being manipulated by illegal means, and the company appears to be leaving no stone unturned in its tenacious quest to hold a select clique of market makers accountable, going so far as to try to drag the US House of Representative’s Committee on the Judiciary, Committee on Financial Services, Committee on Ways and Means, and Committee on Oversight and Reform into this brewing controversy.
A Chronology of Trump Media and Technology Group’s Moves
As we noted earlier in a dedicated post, Trump Media and Technology Group published a comprehensive list of FAQs on the 17th of April 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.
Next, 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 alleged manipulation of its share price: Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital. This letter then prompted a riposte from Citadel, which not only rejected Trump Media and Technology Group’s allegations but also chose to characterize the company’s CEO, Devin Nunes, in a less-than-stellar light, euphemistically speaking.
On the 23rd of April, Trump Media published a 3-step plan for its investors to combat rampant short-selling, recommending that investors hold their DJT shares in a cash account at their brokerage firm instead of a margin account, opt out of any securities lending programs, and move their shares to a Direct Registration (DRS) account at the Company’s transfer agent, Odyssey Transfer & Trust Company.
These steps appear to have had a measurable impact on Trump Media and Technology Group’s share price, which is now up around 20 percent over the past trading week.
A Tale of Two Letters (For Now)
This brings us to the crux of the matter. On the 23rd of April, 2024, Trump Media penned a letter to each of the Chairmen of the U.S. House of Representatives’ Committee on the Judiciary, Committee on Financial Services, Committee on Ways and Means, and Committee on Oversight and Reform, highlighting DJT’s continued inclusion in the threshold list – a tabulation of stocks that have an aberrantly high number of “fail to deliver” (FTDs) shares, which is possibly indicative of naked short-selling activity, where a short-seller sells the shares of a stock without first borrowing them.
Specifically, the letter urged the chairmen of these committees to subpoena records from FINRA, DTCC, and other agencies to get to the root of this malaise.
Now, Trump Media and Technology Group has penned another letter to the same recipients, urging them to subpoena the following members of the DTCC:
- Apex Clearing
- Clear Street
- Cobra Trading
- Cowen and Company
- Curvature Securities
- StoneX Securities
- TradePro
- Velocity Clearing
Do note that Trump Media and Technology Group’s aggressive strategy appears to be having some success, with TradeZero recently taking pains to note that it only allows short-selling based on a pre-borrow.
Meanwhile, the former US President has now received 36 million additional “earnout” shares in Trump Media, bringing his total stake in the company to 64.9 percent, or 114.750 million shares. Do note that Trump’s stake remains subject to a lock-up period.