Trump Files Lawsuit Against Truth Social Co-Founders Amid Volatile Market Debut

April 9, 2024

Trump Files Lawsuit Against Truth Social Co-Founders Amid Volatile Market Debut

Former President Donald Trump’s legal cases keep piling up month after month. In his latest legal battle, he has filed a lawsuit against Truth Social Co-founders Andy Litinsky and Wes Moss.

Another Legal Battle for Trump

Donald Trump has filed a lawsuit against the two co-founders of Trump Media and Technology Group (TMTG), the parent entity of Truth Social. In this case, he alleges that Andy Litinsky and Wes Moss set up the company improperly. Therefore, his suit seeks to remove their stock in the venture. Will he be successful?

TMTG's Volatile Market

When the Trump Media and Technology Group (TMTG) started, they had a lot of success on the Nasdaq exchange. In fact, their shares were trading at a high of $78 at the time. However, they began to witness a decline shortly afterward. Today, it stands at a reduced market price of $37.17.

The Defendants Are Former "The Apprentice" Contestants

The two defendants in the lawsuit are not strangers to Donald Trump. Both Andy Litinsky and Wes Moss were former contestants on his reality TV show, “The Apprentice.” Now, the co-founders are battling against Trump for the ownership and management of the company. This legal battle came as a surprise to many as they didn’t expect them to fall out so quickly.

Dispute Over Ownership

Co-founders Litinsky and Moss are actively seeking to protect their interests in TMTG. Both of them are claiming an 8.6% stake through an agreement that they signed with Trump back in 2021. In addition, they filed a complaint in February in the Delaware Court of Chancery to prevent any actions by Trump that would reduce their shares in any way.

Trump's Counterclaim

Trump launched his counterclaim in Sarasota County, Florida, shortly afterward. He claimed that both Litinsky and Moss had mishandled the TMTG and failed to make it public. Furthermore, he claims that they tried to spoil his deal, causing the company to suffer some damages and significant delays over time. However, the co-founders disagree with Trump’s opinion of the company.

Litinsky and Moss’ Alleged Mismanagement and Obstruction

The lawsuit also accused Litinsky and Moss of gross mismanagement and obstruction. This includes failing “at every turn” and making “wasteful decisions” that harmed prospective TMTG projects. The lawsuit gets further complicated as Trump’s legal case targets their efforts to blow the company’s plans to go public.

The Company Went Public Amidst Legal Battles

Despite the legal battles that they were facing along the way, TMTG successfully went public. They merged with Digital World Acquisition, a publicly-traded shell company, achieving the goal together. While there were many disputes and allegations against the co-founders, they still managed to find their way around it. Therefore, their journey to becoming a publicly listed entity was a rough one.

Trump’s Major Aim

Trump is seeking damages for what he claims to be breaches of fiduciary duty by Litinsky, Moss, and one co-defendant, Patrick Orlando. That’s not all. He also aims to stop them from owning any shares or having any roles in TMTG’s board of directors. Therefore, if successful, Trump will change the company’s ownership and leadership structure greatly.

TMTG Shares Are Still Volatile

Amidst all the legal battles, TMTG’s shares have been fluctuating constantly. This shows that the company’s fate is still unsure. When the stock increased to $51.60, the company was valued at $5.9 billion. Therefore, this shows that their company shares might be changing everyday but they are still performing quite well on Wall Street.

Trump Might Sell His Shares

From initial agreements and documents, Trump is bound by a six-month waiting period before he can sell his shares and interests in TMTG. Now, it seems likely that Trump will do this after the period expires. This need to sell can also be prompted by his pressing financial issues from his legal troubles. If he waits and later pulls his shares, the company’s future might be uncertain.

Trump's Many Legal Battles

The former president has been facing many legal battles over the years. He is currently facing four criminal indictments and a staggering 88 felony charges across four jurisdictions. What’s more, he is facing these challenges while running for presidential office at the same time. With the high number of legal cases, he is facing daily expenses of about $230,000. Therefore, this is causing a lot of financial problems for Trump.

The Impact of the Legal Troubles

Without a doubt, the numerous legal issues that Trump is battling have placed a huge financial burden on him. His bonds are worth millions of dollars, and he is constantly trying to appeal. This means more money will be spent even as he hasn’t paid the outstanding debts. Therefore, this could be a big reason why he would like to sell his shares in TMTG.