Former U.S. President Donald Trump has filed a lawsuit against the co-founders of his media company, Trump Media & Technology DJT, alleging that they have failed to fulfill their obligations, thus forfeiting their stock.
What Happened: Trump has taken legal action against Andy Litinsky and Wes Moss, who are accused of not upholding their responsibilities in setting up the governance structure of Trump Media, launching the Truth Social platform, and finding a suitable merger partner, as reported by Bloomberg. This, Trump claims, has caused damage to the company.
The lawsuit, filed on Mar. 24 in a Florida state court, argues that Litinsky and Moss should not receive their 8.6% stake in the company.
Trump argued that the duo “began ceaseless attempts to thwart" the SPAC merger in the interest of their stakes.
The legal battle is unfolding amid significant fluctuations in Trump Media’s shares, which plummeted by 21% after the company revealed a $58 million loss and minimal revenue for 2023.
See Also: Trump Vs. Biden: Which Candidate Is Losing Ground?
Despite this, Trump’s net worth has reportedly risen due to his Trump Media stake, which he could potentially use to settle legal judgments against him. The company’s market capitalization currently stands at $7.13 billion, with Trump owning 57% of the company, valued at $4.06 billion.
Why It Matters: Trump’s media company, has been under intense scrutiny since its public listing. The company’s financial stability has been questioned after an auditor raised concerns about its viability. The company’s stock also took a hit after it disclosed significant losses for the previous year, leading to a drop in Trump’s net worth by over $1 billion.
Despite its public listing, Trump’s media company has faced challenges in the market, with the stock predicted to struggle. The ongoing legal battle between Trump and his co-founders adds another layer of complexity to the company’s already turbulent journey.
Price Action: On Tuesday, Trump Media & Technology Group shares closed a little over 6% at $51.60 in the regular session. The shares were largely flat in the after-hours trading.
Image Via Shutterstock
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