Trump media forces our regulators to investigate short positions in their stocks
By Carolina Mandl
NEW YORK (Reuters) – The majority stake in the media company owned by Trump's media and technology group President Donald Trump said Thursday it had asked the U.S. Securities and Exchange Commission to investigate recent short-term positions in its stock.
Hedge fund Qube Research & Technologies disclosed about $105 million in short positions on Trump media on Monday, according to documents from the federal government of the German Federal Gazette.
Trump Media, which owns 53% of Trump and is the parent company of the Truth Society platform, said Qube's short position could involve “suspicious activity” in a memo sent to the SEC on Thursday.
Short selling is a controversial practice and is often scrutinized during times of market turbulence. Executives often criticize such deals, which is legal, while some activists point out that they have discovered corporate misconduct.
“We urge you to immediately investigate this suspicious transaction and return your findings to TMTG and any relevant civil and criminal authorities,” the memorandum said.
Trump media also said a banned practice in the United States may have “signs of illegal naked sales of DJT stocks”
A SEC spokesperson declined to comment. Trump Media and Qube did not immediately respond to requests for comment on the memorandum.
Asked about short positions in Trump’s media earlier this week, Qube told Reuters that its position is driven by quantitative models and “does not reflect specific views on the fundamentals of the company.”
The White House answered questions about potential conflicts of interest by pointing out that the president's assets are trusts managed by his children.
“There is no conflict of interest,” White House spokesman Anna Kelly said in an emailed statement.
Investors who hold short positions in company stocks bet that the share price will fall. In short selling, investors borrow shares and sell them, betting that the stock price will fall so that it can be repurchased at a lower price to repay the loan, allowing investors to make up the difference.
Naked stocks are the practice of investors shorting stocks without first borrowing or determining what stocks they can borrow.
This is not the first time Trump's media and technology companies have filed a similar complaint. Last April, it disclosed in a filing with the U.S. Securities and Exchange Commission that it had alerted Nasdaq to its shares “potential market manipulation.”
(Report by Carolina Mandl, other reports by Chris Prentice, New York; Editor of Pete Schroeder in Washington; Editor of Marguerita Choy)
