In a recent article published by MarketWatch, titled “Why Trump Media once again called out ‘naked short selling’ as its stock dropped,” the outlet dismissed claims by Trump Media & Technology Group (TMTG), the parent company of Truth Social, that its stock (ticker: DJT) is being targeted by illegal naked short selling.
The article, which aligns with a broader narrative from mainstream financial media, downplays the allegations of market manipulation, framing TMTG’s complaints as an attempt to deflect from its declining stock price and lackluster financial performance.
However, this dismissal has ignited a firestorm of criticism from retail investors, who accuse MarketWatch and similar outlets of ignoring systemic issues in the financial markets while discrediting legitimate concerns about naked short selling.
This controversy echoes a historical pattern, notably seen in the lead-up to the AMC Entertainment (AMC) short squeeze in June 2021, where retail investor-driven platforms like Franknez.com championed the short squeeze narrative while mainstream outlets dismissed it.
MarketWatch’s Stance on Trump Media’s Claims
MarketWatch’s article, published on April 18, 2025, reports that TMTG filed a complaint with the Securities and Exchange Commission (SEC), alleging that a U.K.-based hedge fund, Qube Research & Technologies, engaged in potential illegal bearish bets against DJT stock, including naked short selling.
Naked short selling involves selling shares without first borrowing them or ensuring they can be borrowed, a practice banned in the U.S. due to its potential to manipulate markets and harm retail investors.
TMTG’s CEO, Devin Nunes, pointed to the stock’s appearance on Nasdaq’s Regulation SHO Threshold Security List as evidence of possible unlawful trading activity, noting that DJT has been one of the most expensive U.S. stocks to short, creating incentives for brokers to lend non-existent shares.
MarketWatch, however, casts doubt on these claims, suggesting that TMTG is scapegoating short sellers to explain a 39% year-to-date stock decline and a 62% drop from its October 2024 peak.
The article cites industry perspectives, including a statement from Qube Research, which asserts that its short position is driven by a quantitative model and not a reflection of TMTG’s fundamentals.
Additionally, MarketWatch references the SEC’s position that appearing on the Reg SHO list does not necessarily indicate naked short selling, as failures to deliver shares can result from administrative or technical issues.
By framing TMTG’s allegations as speculative and its financial struggles as the primary driver of the stock’s decline, MarketWatch aligns with a narrative that minimizes the impact of market manipulation.
Retail Investors Push Back on MarketWatch
The response from retail investors has been swift and vocal, particularly on platforms like X, where users have expressed distrust in MarketWatch’s coverage.
Many accuse the outlet of bias against retail investors and companies like TMTG, which rely heavily on grassroots support.
Posts on X highlight a perceived pattern of mainstream financial media dismissing allegations of market manipulation while promoting narratives that favor institutional investors and hedge funds.
For instance, one user wrote, “MarketWatch is at it again, protecting Wall Street while retail gets crushed.
They did this with AMC, and now they’re denying naked shorting on DJT. Wake up!”
Another commented, “Why does MarketWatch always side with the suits?
Retail investors see through this.
Naked shorting is real, and they’re gaslighting us.”
This sentiment reflects a broader erosion of trust in mainstream financial media among retail investors, who increasingly turn to independent platforms and social media for market insights.
Investors point to MarketWatch’s historical coverage of stocks like AMC and GameStop (GME) as evidence of a disconnect between the outlet’s reporting and the realities faced by retail traders.
In the case of TMTG, retail investors argue that MarketWatch’s dismissal of naked short selling ignores data, such as the high cost of borrowing DJT shares (reportedly 750–900% annually in April 2024) and the stock’s persistent presence on the Reg SHO list, which they view as red flags of potential manipulation.
Echoes of AMC: A Historical Parallel
The controversy surrounding TMTG bears striking similarities to the events leading up to the AMC short squeeze in June 2021, when retail investors defied mainstream media narratives to drive a historic rally.
In early 2021, outlets like MarketWatch, Motley Fool, and Benzinga published articles downplaying the potential for an AMC short squeeze, often emphasizing the company’s weak fundamentals and high debt levels.
For example, Motley Fool articles warned investors against chasing “meme stocks,” while Benzinga highlighted AMC’s operational challenges, dismissing retail-driven momentum as speculative hype.
MarketWatch similarly cautioned against investing in AMC, framing the stock’s volatility as a risky bet driven by irrational exuberance.
In contrast, retail investor-focused platforms like Franknez.com championed the short squeeze narrative, citing high short interest, significant retail ownership, and evidence of synthetic shares created through naked short selling.
Frank Nez, the news blog’s founder, published detailed analyses of AMC’s short interest and market dynamics, rallying retail investors to hold their positions.
These efforts proved prescient when AMC’s stock surged from under $10 in January 2021 to a peak of $72.62 in June 2021, delivering massive gains for retail investors and exposing the vulnerabilities of short sellers.
Retail investors now draw parallels between the AMC saga and TMTG’s current predicament, accusing MarketWatch and its peers of repeating the same playbook: dismissing allegations of market manipulation while focusing on a company’s financial weaknesses.
They argue that this pattern not only undermines retail investors but also obscures the serious issue of naked short selling, which has long plagued the financial markets.
The Seriousness of Naked Short Selling
Naked short selling is not a conspiracy theory or a fairy tale, as some media outlets have portrayed it over the years.
It is a well-documented issue that can distort market prices, erode investor confidence, and disproportionately harm retail investors.
Unlike legal short selling, where shares are borrowed before being sold, naked short selling involves selling shares that do not exist, creating “phantom” shares that artificially increase supply and depress stock prices.
This practice can lead to “fails-to-deliver” (FTDs), where sellers cannot provide the shares to buyers, a phenomenon tracked by the SEC’s Reg SHO list.
The SEC has acknowledged the risks of naked short selling, implementing regulations like Regulation SHO in 2005 to curb the practice.
However, enforcement remains challenging, and critics argue that loopholes allow sophisticated market participants to exploit the system.
High-profile cases, such as the 2008 financial crisis, where naked short selling was linked to the collapse of firms like Bear Stearns and Lehman Brothers, underscore the issue’s severity.
More recently, the GameStop and AMC short squeezes in 2021 brought renewed attention to naked short selling, with retail investors alleging that hedge funds used synthetic shares to manipulate prices.
Despite this evidence, mainstream financial media have often downplayed naked short selling, framing it as a niche or exaggerated concern.
Articles from outlets like MarketWatch frequently emphasize the legality of short selling while glossing over the illegal variant, creating a perception that allegations of naked shorting are unfounded or conspiratorial.
This narrative has fueled distrust among retail investors, who view the media as complicit in protecting institutional interests.
Also Read: “The Game is Rigged”, Says Ex-Citadel Data Scientist
The Broader Implications
The clash between TMTG, MarketWatch, and retail investors highlights a deeper divide in the financial ecosystem: the tension between retail and institutional players, amplified by differing media narratives.
Retail investors, empowered by platforms like X and independent blogs, are increasingly challenging the authority of mainstream outlets, demanding transparency and accountability in market practices.
The TMTG case also underscores the ongoing debate over naked short selling, which remains a contentious issue despite regulatory efforts to address it.
For TMTG, the stakes are high.
With a market capitalization of approximately $8 billion, largely driven by Donald Trump’s brand and retail investor support, the company’s stock is vulnerable to volatility and manipulation.
Retail investors, who hold a significant portion of DJT shares, see their investments as a stand against Wall Street’s perceived excesses, much like they did with AMC and GameStop.
They argue that dismissing naked short selling not only harms TMTG but also undermines the integrity of the broader market.
Why this matters
MarketWatch’s denial of TMTG’s naked short selling allegations has reignited a familiar battle between retail investors and mainstream financial media.
By framing TMTG’s claims as a distraction from its financial struggles, MarketWatch echoes its coverage of AMC in 2021, when it and outlets like Motley Fool and Benzinga underestimated the power of retail-driven momentum.
Retail investors, bolstered by platforms like Franknez.com and X, are pushing back, accusing MarketWatch of bias and highlighting the real and serious issue of naked short selling.
As the TMTG saga unfolds, it serves as a reminder of the persistent challenges in ensuring market transparency and fairness, particularly for retail investors who feel marginalized by the financial establishment.
The question remains: will history repeat itself, with retail investors once again proving the naysayers wrong?
Back to Daily Market News.
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Also Read: Investors now urge President Trump to investigate naked short selling in formal letter
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