Shares of Trump Media (DJT 11.50%) are seeing big gains in Thursday’s trading. The stock price was up 11.3% as of 3:30 p.m. ET today. It had been up as much as 15.3% earlier in the day.
Trump Media is getting a valuation boost following news that the company has requested that the Securities and Exchange Commission (SEC) look into alleged manipulation of its stock. Despite today’s gains, the share price is still down 34% amid the backdrop of a 10% decline for the S&P 500 index.
Trump Media stock rises after manipulation allegation
Trump Media recently said that it had sent a letter to the SEC reporting suspicious activity following news that U.K. hedge fund Qube Research & Technologies had taken out a $105 million short position against its stock.
Despite Qube saying that it had taken out a short position of roughly six million shares, Trump Media says that Nasdaq‘s data suggests that the number of shares sold short only increased from approximately 10.7 million up to 11 million in the reported time period of the purchase.
What’s next for Trump Media?
With its press release today, Trump Media raised the possibility that the “history of suspicious trading” surrounding its stock and lack of documentation for Qube’s reported short position could be indicative of illegal naked short-selling. The company’s inquiries along these lines could be a significant meme-stock catalyst in the near term.
On the other hand, there’s still a lot of uncertainty surrounding the company’s fundamental business outlook further out. Trump Media’s core social platform has been relatively slow to scale up, and it remains to be seen to what extent pushes into the financial products and services space will be sufficient sales drivers.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
