Lottery.com announces investigation into potential short selling activities

Lottery.com (LTRY) announced that it has commenced an investigation into potential short selling activities in its stock and has engaged legal counsel from Paul Hastings LLP to conduct the investigation. “The Company believes that there may have been dissemination of false information relating to the Company with the objective of driving down its stock price and damaging its business. The Company also believes that it may have been the victim of illegal naked short selling in its stock. Within the last six months, Lottery.com stock has been listed on Nasdaq’s Regulation SHO Threshold Security List sixteen times, which indicates a significant number of failures to deliver Lottery.com shares. During that time, SEC data shows a high level of failures to deliver, including over 1.12 million shares on February 10, 2025 alone. Large numbers of failures to deliver that persist over a long period of time may be indicative of naked short selling. Moreover, Lottery.com stock has continued to sustain high borrow rates, peaking at over 500%, suggesting an elevated level of demand to short the stock. The Company will not tolerate the spreading of false information about the Company or the manipulation of its stock. It is prepared to take all actions necessary to report any suspected illegal activity to regulators and to bring actions against anyone that is engaging in illegal activity to safeguard shareholder interest and ensure market transparency. This investigation builds on prior referrals already made by the Company to certain regulators including Nasdaq MarketWatch, the Securities and Exchange Commission and the Department of Justice,” the company stated.