Trump Media sues co-founders of Truth Social: Here's why
Trump Media & Technology Group, the parent company of Truth Social and controlled by former President Donald Trump, has registered a lawsuit against co-founders Andy Litinsky and Wes Moss. The legal action, initiated on March 24 in a Florida court, aims to nullify their ownership in the multi-billion dollar company. This development is part of the ongoing narrative surrounding the company's efforts to go public, a move that has increased Trump's net worth and caused ripples on Wall Street.
Allegations against Litinsky and Moss
The lawsuit accuses co-founders Litinsky and Moss, both former contestants on Trump's NBC show The Apprentice of making a series of "reckless and wasteful decisions" during the company's establishment. These alleged missteps have reportedly resulted in substantial damage to the company. The legal document states, "Moss and Litinsky failed spectacularly at every turn." The lawsuit seeks to force the co-founders to give up their shares in the company.
Co-founders' stake in company under scrutiny
According to the lawsuit, Litinsky and Moss were set to receive 8.6 million shares in the new company via United Atlantic Ventures. Based on Tuesday's closing price of $51.60 per share, this stake is valued at approximately $444 million. The lawsuit argues that this was an "exceptional opportunity" for Moss and Litinsky, who were "riding President Trump's coattails." It further states: "Without President Trump, Truth Social would have been impossible."
Counter lawsuit by Litinsky and Moss
Before Trump's lawsuit, Moss and Litinsky had initiated their own legal proceedings against the former President in Delaware. They alleged that Trump intended to dilute their stake in the new company. Trump currently holds 78.8 million shares in Trump Media, which went public last week, a stake estimated to be worth about $4.1 billion.
Alleged mismanagement delayed company's IPO
The lawsuit also claims that the co-founders' mismanagement led to big delays in the company's Initial Public Offering (IPO). Moss and Litinsky are accused of not establishing proper corporate governance, and securing a special purpose acquisition company (SPAC) to ensure the firm's public debut and provide necessary funding. The duo in return is claiming that Trump tried to dilute their stocks by proposing an increase in total authorized shares.
