Trump Media presses US regulator to investigate short positions in its stocks

Reuters
04-18

By Carolina Mandl

NEW YORK (Reuters) - The media company majority owned by President Donald Trump, Trump Media & Technology Group, said on Thursday it had asked the U.S. Securities and Exchange Commission (SEC) to investigate a recent short position in its stocks.

Hedge fund Qube Research & Technologies disclosed a roughly $105 million short position in Trump Media on Monday, according to a filing with Germany's federal Gazette Bundesanzeiger.

Trump Media, which is 53% owned by Trump and is the parent company of the Truth Social platform, said in a memo sent to the SEC on Thursday it was concerned Qube's short positions could involve "suspicious activity."

Short selling is a controversial practice that often comes under scrutiny during times of market turmoil. Executives typically criticize such trading, which is legal, while some activists point out they have uncovered corporate misconduct.

"We urge you to immediately investigate this suspicious trading and report your findings back to TMTG and any relevant civil and criminal authorities," the memo said.

Trump Media also said there could be "indications of illegal naked short selling of DJT shares," a practice banned in the U.S.

A spokesperson for the SEC declined to comment. Trump Media and Qube did not immediately respond to requests for comment on the memo.

When asked about its short position in Trump Media earlier in the week, Qube told Reuters its positions are driven by a quantitative model and "do not reflect a specific view on the fundamentals of the company."

The White House responded to a question about potential conflicts of interest by noting the president's assets are in a trust managed by his children.

"There are no conflicts of interest," White House spokesperson Anna Kelly said in an emailed statement.

Investors who take a short position in a company's stock are betting that the share price will decline. In a short sale, investors borrow shares and then sell them, betting that the share price will fall so that they can be bought back at a lower price to repay the loan, allowing the investor to pocket the difference.

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.

It is not the first time Trump's media and technology company filed similar complaints. In April last year, it disclosed in a filing with the SEC that it had alerted the Nasdaq of "potential market manipulation" in its shares.

(Reporting by Carolina Mandl, additional reporting by Chris Prentice, in New York; editing by Pete Schroeder in Washington; Editing by Marguerita Choy)

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