Bisina SomtoDonald Trump has commenced legal action against two co-founders of Trump Media & Technology, saying they allegedly breached an agreement and seeking to strip them of their stake in the company.
In the lawsuit filed on March 24th in a Florida state court, Trump contends that Andy Litinsky and Wes Moss failed to fulfil their obligations regarding the establishment of Trump Media and, therefore, should forfeit their 8.6% stake, valued at a hefty $606 million.
This legal drama unfolds against the backdrop of Trump Media’s tumultuous stock performance following its merger with a special purpose acquisition company (SPAC).
After an initial surge, the stock plummeted by 21% following the disclosure of a $58 million loss and minimal revenue for 2023, coupled with the company’s admission of its reliance on funds from the SPAC deal for operational sustenance. However, the stock exhibited a 6.1% increase, reaching $51.63 on Tuesday afternoon, according to Bloomberg.
At the heart of the dispute lies Trump’s allegation that Litinsky and Moss failed to establish the corporate governance structure of Trump Media, launch the Truth Social platform, and secure a suitable merger partner, thus hindering the company’s progress. Conversely, Litinsky and Moss argue that Trump sought to dilute their stake by seeking additional shares.
Trump’s net worth stands to benefit from his stake in Trump Media, potentially shielding him from significant legal liabilities. However, a six-month lockup prevents him from immediately selling his shares. With Trump holding a majority ownership stake of 57%, valued at $4.02 billion, according to filings with the US Securities and Exchange Commission, the outcome of this legal battle could have profound implications for his financial standing.
The Delaware judge overseeing Litinsky and Moss’s lawsuit has expressed surprise at Trump’s decision to file in Florida rather than pursuing counterclaims in his courtroom. The judge has indicated a willingness to explore potential sanctions against Trump, underscoring the complexity of the legal proceedings surrounding Trump Media’s turbulent trajectory.
Somto is an Entertainment Reporter with a passion for uncovering the latest stories in the world of entertainment. As a dedicated journalist, Somto delivers in-depth reporting, exclusive interviews, and breaking news coverage.
She covers a wide range of topics, from celebrity interviews to industry trends and film reviews.
As an Entertainment Reporter for Prime Business Africa, She continues to provide comprehensive and insightful coverage of the entertainment industry, offering readers an insider's perspective on the latest developments and trends. She is a trusted source for breaking news, exclusive interviews, and thought-provoking analyses.
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