Trump Media Calls for Hedge Fund Investigation Over Stock Bet

2025-04-18 companies

New York, Thursday, 17 April 2025.
Trump Media requests regulators to probe Qube’s substantial short position, alleging illegal trading activities. This highlights ongoing market tension and could impact regulatory practices.

Background of the Investigation

Trump Media & Technology Group (TMTG), owner of the Truth Social platform, has drawn attention to a substantial short position taken by the London-based hedge fund Qube Research & Technologies. Qube disclosed this position through regulatory filings, marking a key moment in stock trading activities concerning TMTG [1][2]. According to available data, this short position accounted for about 2.5% of TMTG’s outstanding shares, a bet valued at approximately $105 million [1][3]. Such substantial short interest has prompted TMTG to seek an investigation from the U.S. Securities and Exchange Commission (SEC), alleging illegal short-selling activities that could influence market dynamics [2][4].

Regulatory and Market Reactions

The company has issued a memo to the SEC urging an investigation into what it describes as “suspicious trading activities” that might involve illegal naked short-selling. These concerns arise amidst a backdrop of TMTG’s fluctuating stock value and previous incidents of suspicious trading history, which included TMTG’s placement on Nasdaq’s Regulation SHO Threshold Security List for over two months in the previous year [2][5]. On the other hand, Qube has stated that its positions are model-driven and do not necessarily reflect a specific view on TMTG’s fundamentals [1][3]. However, the swift disclosure of Qube’s substantial short position could force regulators to scrutinize the wider practices of hedge funds and their impact on stock markets [1][4].

Market Performance and Future Outlook

TMTG’s stock has been subject to significant market volatility in 2025, with a reported 44% drop in share value this year despite an earlier doubling in value throughout 2024 [3][6]. Additionally, the stock rallied by about 7% in New York on the day the news became public, though it has still suffered a substantial decline overall [1][2]. The Trump Media stock’s performance has been further complicated by the disclosed large short interest and trading activities surrounding Qube’s position, potentially affecting investor perceptions and the stock’s future trajectory [4][6]. Whether the SEC’s investigation will result in regulatory changes remains to be seen, but TMTG’s proactive stance illustrates the ongoing tensions between corporate entities and speculative trading activities [5][6].

Sources

Trump Media Hedge Fund