Securities and Exchange Commission Chair Gary Gensler on Tuesday refused to comment on speculation of whether Trump Media is a funding organ for Donald Trump’s presidential campaign.
“I’m not going to speak on any one company,” Gensler said in an interview on CNBC’s “Squawk Box,” responding to a question on whether Trump Media is merely a vehicle to finance the former president’s bid for a second term.
“What’s important is that their disclosures are accurate and that folks aren’t in the market front-running or trading on insider information,” Gensler said.
Since the DJT ticker went public on the Nasdaq on March 26, the stock has whipsawed, seeing a high of nearly $80 per share and a low of roughly $12 per share. The stock opened Tuesday at roughly $49.
As the majority shareholder, Trump stands to gain the largest financial boost from DJT upswings.
On Friday, Trump’s stake increased by 36 million more shares on top of his existing 78.8 million, due to a clause in the company’s contract that unlocks bonus shares as the stock hits certain checkpoints. Given that bump, Trump’s stake had a paper value of over $5 billion at Tuesday’s market open.
Trump is still prohibited from cashing in because of a standard lock-up provision in the contract that requires him to wait six months before selling or trading any shares.
But after that deadline, it could be a timely windfall for the former president, who faces a flurry of financial woes due to several lawsuits and presidential campaign expenses.
Trump’s campaign showed early signs of a budget squeeze, raising questions of whether the presumptive Republican nominee would turn his DJT shares into campaign fuel.
The DJT stake comes with a bonus for Trump: There are no limits on the size of an investment into Trump Media as there are caps on donations to Trump’s presidential campaign, which is heavily reliant on high-dollar donors.
Trump has not signaled whether he would use his DJT stake for political financing.
Given the extraordinary volatility of the stock, some see it as a signal that investors are trading on something other than market metrics.
Gensler also ducked questions about whether DJT’s erratic stock behavior is a potential indication of market manipulation.
Trump Media CEO Devin Nunes has claimed that the stock’s rapid falls are the product of possible “naked” short selling, a trading practice where the seller bets on the stock’s price decline.
“Every individual is allowed to form their own view. That’s one of the beauties of our capital markets,” Gensler said. “It’s that tens of thousands and millions of people can do their own research.”