For the time being, Donald Trump seems to be prevailing in his fight against short sellers.
The social-media company of the former president, Trump Media & Technology Group Corp. DJT, +2.61%, has successfully recovered on the stock market, attributing its previous share price difficulties to naked short selling.
Ever since the company behind the Truth Social platform took a stand against short sellers in mid-April, its stock price has experienced a significant surge. Starting from a low of $22.84, it has now reached a closing price of $47.93, more than doubling its value.
The price fluctuations have caused significant changes in Trump’s personal investment in the company, resulting in gains and losses amounting to billions. Due to its recent surge, Trump was able to secure an extra earnout of shares valued at $1.8 billion. In order to receive that payoff, the stock would have needed to remain above $17.50 for at least 20 out of the company’s initial 30 trading days.
Based on the latest closing value, Trump’s ownership in the company was valued at approximately $5.5 billion.

It is unclear whether the company’s earlier stock decline, which saw a drop of almost 66% from its peak of $66 in its first days of trading after a late-March launch, can be attributed to short selling. The company has reported disappointing earnings, significant losses, and limited signs of future growth in its business fundamentals.
However, over the past three weeks, the company’s CEO, Devin Nunes, has taken a proactive approach. He has been consistently releasing statements advising shareholders on how to secure their shares and prevent them from being borrowed by short sellers. Additionally, he has been urging members of Congress to initiate an investigation.
Nunes, a former congressman from California aligned with Trump, has made specific accusations against market participants, claiming they are involved in “naked short selling.” Unlike the conventional method of short selling, where traders borrow shares before selling them to profit from an anticipated price decline, naked short selling involves selling shares without borrowing them beforehand. The practice is widely criticized and was effectively banned after the 2008 economic crisis.
Attributing a stock decline to naked short selling has been a common practice among companies facing mounting market pressure for quite some time. In a rather infamous incident, Patrick Byrne, the former Chief Executive of Overstock, who was known for his support of Trump, was removed from his position after revealing an affair with a woman who turned out to be a Russian spy. Back in 2005, Byrne made the bold claim that a group of short sellers, who were allegedly led by a mysterious figure referred to as a “sith lord,” were colluding to drive down the stock price of his company.
Nunes has accused four firms, including Citadel Securities, Virtu Financial, G1 Execution Services, and Jane Street Capital, of being responsible for over 60% of the trading volume in Trump Media & Technology Group shares.
That elicited a strong response from Citadel, the investment firm led by billionaire investor and Republican megadonor Ken Griffin, who dismissed Nunes as a “loser.”
According to the firm’s spokesperson, Devin Nunes is attempting to attribute his declining stock price to “naked short selling,” which is seen as a desperate move by many. “Nunes is the kind of person who would have been let go by Donald Trump on ‘The Apprentice.’ If he were employed at Citadel Securities, he would be dismissed, as our commitment to ability and integrity is paramount in all our endeavors.
Nunes responded by characterizing Citadel’s comment as a “unhinged attack.”
“Citadel Securities, a large corporation that has faced fines and censure for various offenses, including those related to naked short selling, has gained notoriety for its actions that have negatively impacted retail investors on behalf of other companies. Given this track record, it is questionable for them to claim any authority on the subject of ‘integrity’,” Nunes expressed in a post on Truth Social.
No responses were received from representatives of Virtu, G1, and Janes Street when contacted for comment.
See also : At a Mar-a-Lago event, Trump compares the Biden administration to the “Gestapo.”