Trump Media & Technology Group, owned by former President Donald Trump, has sued two of its co-founders, aiming to revoke their stakes in the company.
The business group is claiming that the two co-founders mismanaged the social media platform in its initial stages and, as a result, should forfeit their shares in the company.
Trump Media launched a legal action in Florida state court on March 24 against Andy Litinsky and Wes Moss, both co-founders of Trump Media and former participants on Trump’s NBC program “The Apprentice.”
The lawsuit claims their attempts to establish the company involved a sequence of “reckless and wasteful decisions,” resulting in considerable harm.
The suit urges a judge to revoke their shares in the company because the duo committed a string of expensive errors leading to a significant delay in the company’s public debut.
United Atlantic Ventures, the law firm through which Litinsky and Moss conduct business, declined to comment.
Litinsky and Moss currently have 8.6% stake in the company, currently valued at $606 million, according to Bloomberg.
Trump holds 78.8 million shares in Trump Media, now valued at approximately $4.1 billion based on Monday’s closing price.
Litinsky and Moss proposed the concept of Truth Social to him after his ban from the platform formerly known as Twitter following the January 6, 2021, Capitol attack.
According to NBC News, Trump Media & Technology Group said in the lawsuit that it was a “phenomenal opportunity for Moss and Litinsky” and they were both “riding President Trump’s coattails.”
“Without President Trump, Truth Social would have been impossible,” the lawsuit said.
The legal battle comes amid volatile fluctuations in Trump Media’s shares, which started trading following its merger with a special purpose acquisition company (SPAC).
The stock plummeted by 21% on Monday subsequent to Trump Media’s revelation of a $58 million loss and minimal revenue for 2023 in a securities filing. However, there was a 6.1% uptick in the stock, reaching $51.63 at 3:53 p.m. in New York on Tuesday.
In February, Moss and Litinsky initiated a legal action against Trump’s company in Delaware Chancery Court, claiming that he tried to diminish their ownership stakes by expanding the total number of authorized shares in the company from 120 million to 1 billion.
