Article Summary:

• Trump Media has requested an SEC investigation into alleged illegal naked short selling by UK hedge fund Qube Research & Technologies, which disclosed a short position of six million DJT shares.
• Despite minimal revenue ($3.6 million in 2024), TMTG is expanding beyond Truth Social into streaming (Truth+), financial services (Truth.Fi), and cryptocurrency partnerships, targeting what it calls the “Patriot Economy.”
• With a $4.85 billion market cap, TMTG stock trades at an extremely high P/S ratio of 1,340x and is predicted to underperform the broader markets.

Trump Media and Technology (NYSE:DJT) has formally requested that the Securities and Exchange Commission (SEC) investigate what it describes as “suspicious trading activity” in its stock, specifically targeting UK-based hedge fund Qube Research & Technologies.

In a memo addressed to SEC Acting Chairman Mark Uyeda, the operator of Truth Social alleged potential illegal naked short selling after Qube disclosed a short position of six million shares in DJT stock on April 10. The disclosure was made in Germany to comply with that country’s short-selling regulations.

Source: Global News Wire

Trump Media claims the timing and disclosure location raise red flags, especially since Nasdaq data shows the total short interest in DJT has remained relatively unchanged at approximately 11 million shares from March 31 through April 16.

Qube, which operates with a data center in Iceland, has stated its position is based on quantitative models rather than company fundamentals. The hedge fund’s short position is valued at approximately $105 million.

This marks the second time Trump Media has called for regulatory intervention regarding its stock trading patterns. Last June, the company asked Nasdaq and Congress to investigate trading “anomalies.”

Trump Media, majority-owned by President Donald Trump’s trust, has seen its share price decline 39% year-to-date and 62% from its October peak. The company’s stock previously appeared on Nasdaq’s Regulation SHO Threshold Security List for more than two months in 

2024, which Trump Media cites as further evidence of potential market manipulation.

Naked short selling, which involves selling shares without first borrowing the stock, is illegal in U.S. markets.

Is DJT a Good Stock Right Now?

Trump Media and Technology Group (TMTG) is aggressively expanding beyond its social media origins, positioning itself as a multi-platform company that spans media, entertainment, and financial services, while also alleging market manipulation of its stock.

DJT, which operates Truth Social, recently reported a strong cash position of $777 million at the end of 2024 despite generating just $3.6 million in net sales for the year. TMTG said it used $61 million to fund operating activities in 2024, most of which was attributed to legal expenses related to its March 2024 SPAC merger.

TMTG is approaching the completion of beta testing for Truth+, its streaming service featuring news, entertainment, and faith-based programming. The platform is now available in Canada and Mexico, with apps for iOS, Android, Roku, Apple TV, Android TV, and Amazon Fire TV. The company has built what it describes as an “uncancellable” proprietary content delivery network to power the service.

TMTG recently launched a financial services division under the Truth.Fi brand, partnering with Yorkville America Equities and Index Technologies Group to offer “America First” investment products. 

It also announced plans to partner with Crypto.com to launch exchange-traded funds later this year.

CEO Devin Nunes indicated TMTG is exploring opportunities to evolve into a holding company with subsidiaries spanning several industries, targeting what he calls the “Patriot Economy” with products free from “debanking, political retaliation, and obnoxious corporate messaging.”

What is the TMTG Stock Price Prediction?

TMTG reported revenue of $3.61 million in 2024. However, it remains unprofitable and posted an operating loss of $183 million last year. 

Valued at a market capitalization of $4.85 billion, TMTG stock trades at a lofty trailing price-to-sales multiple of 1,340x. 

TMTG stock needs to shore up its financials and profit margins to boost investor confidence and deliver consistent gains over time. 

While there is no official TMTG stock price prediction, the tech stock will likely underperform the broader market over the next 12 months.