Trump Media alerts Nasdaq of suspected market manipulation to drive down stock price

Trump Media alerted Nasdaq Inc. of what the company suspects is market manipulation aimed at driving down the price of its shares.

In a letter to the exchange, CEO of the company Devin Nunes (formerly a California Congressman) outlined what he described as "naked" short selling.

This concept entails market actors selling shares they don't own or haven borrowed. According to CNN, people will then try to buy shares at a reduced price to cover themselves, a practice that is generally illegal. Legitimate short sellers borrow the shares before selling.

Nunes added that Trump Media shares are in a list that's "indicative of unlawful trading activity." "This is particularly troubling given that 'naked' short selling often entails sophisticated market participants profiting at the expense of retail investors," he said.

The letter comes as the company's stock plunged after successfully going public, initially riding a wave of excitement that valued it at $10.8 billion.

But going public has helped the company's coffers. Nunes told Fox Business that it has $200 million, part of which it will use to create a streaming service where, it said, creators "won't be cancelled."

The company's only current product, social media platform Truth Social, had fewer than half a million active users in February.

Whether Trump Media will be able to leverage the former president's popularity to attract users to the streaming service is an open question.

Truth Social's users are far and few compared to behemoths such as Facebook or X (formerly Twitter). Its revenue from 2023 was $4.1 million and lost $58 million.

The company said the streaming service will start on Truth Social before moving on to home TV streaming. It didn't provide a timeline for the rollout but said it will include ""news networks, religious channels, family-friendly content including films and documentaries; and other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services."