(Reuters) -The company that owns Donald Trump's social media platform Truth Social said on Tuesday it has sent a letter to the commissioner of the Louisiana Office of Financial Institutions to open an investigation into alleged "illicit activities" in the trading of its shares.
The letter, from Trump Media and Technology Group's (TMTG) CEO Devin Nunes to Commissioner Scott Jolly, asks the office to look into any kind of market manipulation and, particularly, whether the trading has violated Louisiana Securities Law.
According to the letter, a large number of TMTG's shares traded in the last 30 trading days have been short sales, leading to a high volume of failures to deliver (FTDs), which happen when one party in a trading contract does not meet their trading obligations.
Short selling involves borrowing a company's shares and selling them in the hope of later buying them back at a lower price before returning the shares to their owner.
The letter published SEC data that indicated FTDs exceeded a million shares on 11 different trading days between April 9 and April 30, reaching a peak of over 2.3 million FTDs on April 29 alone.
"The anomalies surrounding the trading of DJT suggest the possibility of unlawful collusion among multiple market counterparties," Nunes wrote.
TMTG has been on a roller-coaster ride since going public. An army of Trump supporters and speculators snapped up its shares, sending them soaring as much as 59% in their Nasdaq debut on March 26, but the stock has since reversed those gains, leaving the company with a market value of about $9 billion.
The company's tiny revenue, deep losses and sky-high valuation have led many investors to predict their shares would tumble. It reported revenues of $770,500 for the March quarter and an adjusted operating loss of $12.1 million.