Donald Trump has initiated a legal battle against two co-founders of Trump Media & Technology Group Corp., alleging that they improperly established the company and are not entitled to any stock. Trump contends that Andy Litinsky and Wes Moss violated an agreement regarding the company’s formation, disputing their 8.6% stake valued at $606 million. This lawsuit, filed on March 24 in Florida state court, has surfaced following Litinsky and Moss’s own suit against Trump in Delaware Chancery Court over their promised stake in the social media company.
The legal confrontation unfolds amidst turbulent trading of Trump Media’s shares, which began trading last week post-merger with a special purpose acquisition company (SPAC). On Monday, the stock plummeted by 21% following Trump Media’s disclosure of a $58 million loss and minimal revenue for 2023, emphasizing its dependency on funds from the SPAC deal to sustain operations. However, on Tuesday, the stock rebounded by 6.1%, reaching $51.63 in New York.
Trump alleges that Litinsky and Moss failed to establish the corporate governance structure of Trump Media adequately, launch the Truth Social platform, and secure an appropriate merger partner, resulting in damage to the company. He asserts that they initiated continuous efforts to impede the blank check deal in pursuit of their respective stakes. In their counterclaim, Litinsky and Moss argue that Trump planned to seek additional shares, thus diluting their stake. Lawyers representing Litinsky and Moss declined to comment on Trump’s lawsuit.
Trump, the presumed Republican nominee for the upcoming presidential election in November, has witnessed a surge in his net worth due to his stake in Trump Media, which he could potentially leverage to settle legal judgments against him, although a lockup prevents him from selling his shares for six months. Despite recent fluctuations, Trump Media maintains a market capitalization of $7.05 billion, with Trump’s 57% stake valued at $4.02 billion. In the Delaware case, Judge Sam Glasscock III opted against expediting Litinsky and Moss’s suit after Trump’s legal team agreed not to diminish the value of their shares. However, Litinsky and Moss indicated their intent to request an order to halt the Florida suit while litigating claims of Trump’s premeditated targeting of their stake.
Judge Glasscock expressed astonishment upon learning of Trump’s Florida lawsuit, suggesting possible sanctions against the former president in the Delaware case.
The case in Florida is titled Trump Media & Technology Group v. United Atlantic Ventures, filed in the Florida Circuit Court, 12th Judicial Circuit (Sarasota).
