Donald Trump in an interview with Newsmax/ screenshot
Donald Trump is now being sued by Andy Litinsky and Wes Moss, former contestants on Trump’s reality television show “The Apprentice” and who co-founded Truth Social. Their lawsuit comes just a week after Trump sued them demanding that they fork over their shares in his Truth Social social media company currently estimated as being worth $606 million.
Bloomberg reported that a Delaware judge granted a request by Trump Media & Technology Group Corp.’s co-founders Andy Litinsky and Wes Moss to add the claim to their suit alleging Trump tried to dilute their 8.6% stake in the company, which operates his struggling Truth Social platform.
First Donald Trump sued blaming the duo for being the cause of Truth Social’s plummeting in value just after its IPO. Now Andy Litinsky and Wes Moss are suing Donald Trump, demanding they be allowed to unload their shares in the company now, rather than have to wait a required minimum of six months to do so. They maintain that Trump diluted the value of their 8.6% share by increasing Trump Media’s total shares from 120 million to 1 billion.
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Selling now would also be a smart move since most observers expect Truth Social to continue to drop.
The two came up with the idea for Truth Social, a new social media company to compete directly against Twitter after Twitter banned Trump from its platform during his presidency due to his making hostile, racist and false posts.
Bloomberg also reported that lawyers for Trump Media said Litinsky and Moss sought to improperly amend their Delaware suit so they could replace their existing claims with new ones rather than file a new complaint. Company lawyers said share lockups are common in blank-check transactions, and that allowing the co-founders to “dump” their stock on the market would “harm the company and other stockholders.”
Trump Media leaped out of the gate when it began trading on the NASDAQ on March 26, hitting a high of above $79 a share. The company had a valuation of about $10 billion, but that dropped to only $6.6 billion after its stock plunged to a low of $51.60 on Tuesday. Donald Trump saw his personal stake in Truth Social drop in value from more than $6 billion to $3.8 billion.
But all of this was just on paper. Financial experts said the stock was overvalued only because of the special deals that Trump made with investors and rules preventing the sale of stock for at least six months.
So, what caused the stock to plummet?
Even though it was widely reported long before the stock offering that Truth Social and Trump Media were losing money, the stock dropped after it came out this week that the company reported a net loss of $58.2 million on revenue of just $4.1 million in 2023.
