Former President Donald Trump’s Trump Media & Technology Group is suing two co-founders, Andy Litinsky and Wes Moss, accusing them of several business failings and arguing they should not receive their collective 8.6% stake in the media company. The lawsuit claims Litinsky and Moss failed to establish corporate governance at Trump Media and hindered the launch of Truth Social, Trump’s social media platform, causing damage to the company in the process. Litinsky and Moss are also accused of attempting to thwart Trump Media’s merger with Digital World Acquisition Corp., which set the company up to go public on March 26.
Litinsky and Moss previously sued Trump Media in February, claiming the company was trying to dilute their shares ahead of its public listing by increasing the amount of authorized stock from 120 million shares to one billion. They alleged that Trump and/or his associates planned to give new shares to reduce their collective stake to less than 1%. The shares Litinsky and Moss received were valued at around $600 million mid-Tuesday afternoon. Trump Media is now seeking restitution of these shares that were claimed to be “failed to earn,” in addition to damages for alleged breaches of fiduciary duty. Litinsky and Moss could not immediately be reached for comment.
The former president’s stake in Trump Media is worth $4 billion as of market close Tuesday, representing most of Trump’s estimated net worth of $5.9 billion. This legal battle comes as venture capitalist Michael Shvartsman and his brother, Gerald Shvartsman, who are linked to an insider trading case regarding the Trump Media and Digital World Acquisition Corp. merger, are moving closer to potential guilty pleas. The brothers, who have pleaded not guilty to criminal charges of insider trading and conspiracy, are scheduled to attend a change of plea hearing on Wednesday.
Trump Media went public last week, significantly increasing the former president’s net worth. Although the company’s stock initially performed well, it dropped about 20% on Monday after revealing full-year revenues of $4.1 million on a net loss of $58.2 million. However, the shares increased more than 5% on Tuesday and closed at $51.60. Trump was facing a deadline to pay part of a $454 million bond in a civil fraud case against him but has since made progress by posting a $175 million payment on Monday. Trump is not able to sell his shares in Trump Media for six months.
In summary, former President Donald Trump’s Trump Media & Technology Group is embroiled in a legal battle with two co-founders, Andy Litinsky and Wes Moss, over their stake in the company. Litinsky and Moss have accused Trump Media of trying to dilute their shares, while Trump Media is claiming the co-founders failed to establish corporate governance and hindered the launch of Truth Social. The lawsuit seeks restitution of the shares issued to Litinsky and Moss, valued at around $600 million, and damages for alleged breaches of fiduciary duty. As the legal battle continues, Trump’s net worth and the performance of Trump Media’s stock are closely watched.
