Trump Media and Technology Group (Trump Media & Technology Group Corp.) saidQuasarsarcadeAn illegal form of short selling could be the reason its shares have been hit hard, and it is asking Nasdaq Inc.'s regulators to intervene.

The company that supports former President Donald Trump's Truth Social network has sent a letter to Adena Friedman, chairman of Nasdaq, asking her to ensure that market makers abide by rules that prevent "naked" short selling. Trump media pointed out that the data showed "potential market manipulation".

Former US President Donald Trump is on trial in Manhattan.

The share price of Trump Media (Trump Media) has fallen by about half in the days after the merger, from more than $66 a share, and the company will become a public company. One of the reasons why the company's share price has plummeted in recent days is its lack of revenue and lack of any profits. There is widespread scepticism about the business prospects of Trump Media, which lost more than $50 million on revenue of just $4 million last year.

Plus the valuation of $8 billion north has triggered a wave of bets to short the stock, including short selling. Investors must also consider the impact of Trump's legal dilemma, including the ongoing criminal trial in Manhattan.

Short sellers can borrow shares from existing owners for a fee, sell them, and then buy them back when prices fall, making a legitimate profit. The short sellers then return the borrowed shares to their owners and pocket the difference.

But selling stocks-naked short selling-without actually borrowing any shares is not allowed. Trump media said it wanted Nasdaq to ensure that market makers comply with rules that require brokers to disclose their "net short" positions and prevent lending of stocks that do not actually exist.

Devin Nunes Nunes, chief executive of Trump Media, said in the letter: "this is particularly disturbing given that 'naked' short selling often requires seasoned market participants to profit at the expense of retail investors."

Trump media said the company's shares were reported to be "the most expensive American stocks to short", giving brokers a "huge financial incentive to lend stocks that do not exist". The company cited four market participants as saying they were responsible for more than 60 per cent of stock trading volumes, including Citadel Securities, Virtu Americas, G1 Execution Services and Jane Street Capital.

The data quoted by Trump media do not necessarily reflect any unusual activity, nor do they necessarily indicate any misconduct. A representative for Citadel Securities denied Trump's media claims and criticized Nunes for trying to "blame naked short selling" for his share price's decline. A representative for Virtu declined to comment; other companies did not immediately respond to messages.

"Nasdaq is committed to adhering to the principles of liquidity, transparency and integrity in all our markets," a Nasdaq representative said in an emailed statement. " We have long advocated transparency in short selling and have actively supported the rules and enforcement efforts of the Securities & Exchange Commission (SEC) to monitor and prohibit naked short selling.