Trump sues Trump Media co-founders in bid to void their stock

Donald Trump is suing two co-founders of Trump Media & Technology Group, the newly public parent company of his Truth Social platform, arguing that they should forfeit their stock in the company because they set it up improperly.

The former US president’s lawsuit, which was filed on March 24 in Florida state court, follows a complaint filed in February by those co-founders, Andy Litinsky and Wes Moss. Their lawsuit sought to prevent Trump from taking steps the two said would sharply reduce their combined 8.6% stake in Trump Media. The pair filed their lawsuit in the Delaware Court of Chancery.

Trump’s lawsuit claims that Litinsky and Moss, who were both contestants on Trump’s reality-TV show “The Apprentice,” mishandled an attempt to take Trump Media public several years ago, allegedly putting the whole project “on ice” for more than a year and a half.

But it also targets the pair over their Delaware suit against Trump, saying that it was one of several attempts they made to block Trump Media’s ultimately successful plan to go public. Trump Media accomplished that goal by merging with a publicly traded shell company called Digital World Acquisition in March.

A regulatory filing with the Securities & Exchange Commission early on Monday morning showed the company had only achieved revenue of $4.1m in 2023, with net losses reaching $58.2m.

In 2022, the company said it made a profit of $50.5m.

Since the merger with Digital World Acquisition Corp, Trump Media began trading on the Nasdaq under the ticker symbol DJT on Tuesday, reaching a high of $79/share by Thursday.

Research firm Similarweb estimates that Truth Social had roughly 5 million monthly visits in February of this year. By comparison, Facebook had 15.2 billion visits, while Reddit had 2 billion.

“TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump,” the company said in the filing, citing risks that include the harassment of advertisers and criticism of Truth Social’s moderation practices.

“The value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”