Former President Donald Trump’s Trump Media & Technology Group is currently embroiled in a legal battle with two of its co-founders, Andy Litinsky and Wes Moss. The media company is suing the co-founders, alleging that they failed to establish corporate governance and hindered the launch of Trump’s social media platform, Truth Social. Litinsky and Moss are accused of attempting to prevent Trump Media’s merger with Digital World Acquisition Corp., which would have taken the company public. The lawsuit seeks to revoke the shares issued to Litinsky and Moss, valued at around $600 million, and seeks damages for breaches of fiduciary duty.
Litinsky and Moss had previously filed a lawsuit against Trump Media in late February, claiming that the company was attempting to dilute their shares ahead of its public listing. They alleged that Trump and his associates planned to give new shares to themselves and reduce Litinsky and Moss’ collective stake from 8.6% to less than 1%. Litinsky and Moss have not publicly commented on the lawsuit filed by Trump Media.
Former President Trump holds a $4 billion stake in Trump Media, representing most of his net worth estimated at $5.9 billion by Forbes. The company went public last week, with its stock initially performing well but experiencing a 20% drop on Monday after revealing full-year revenues of $4.1 million on a net loss of $58.2 million. The shares closed at $51.60 on Tuesday. Trump is currently unable to sell his shares in Trump Media for six months.
The legal troubles at Trump Media come amid developments in an insider trading case linked to the company’s merger with Digital World Acquisition Corp. Venture capitalist Michael Shvartsman and his brother, Gerald Shvartsman, are facing criminal charges of insider trading and conspiracy. The brothers, who have pleaded not guilty, are reportedly considering potential guilty pleas in the case. Such hearings typically involve defendants admitting guilt.
Despite the legal challenges, Trump Media’s public listing has significantly increased the former president’s net worth. The company’s stock performance has been volatile, but shares increased more than 5% on Tuesday. Trump recently made progress in addressing a $454 million bond in a civil fraud case against him, making a $175 million payment on Monday. The legal battles and financial developments surrounding Trump Media continue to unfold, impacting both the company and its co-founders.
