Trump Sues 'Truth Social' Co-Founder Over Multi-Million Dollar Equity Dispute

"Litinsky·Moss Have No Rights to 8.6% Stake"
Trump Holds 57% Stake... Valued at $4 Billion

Former U.S. President Donald Trump is engaged in a legal battle over shares by suing the co-founders of the parent company of the social networking service (SNS) 'Truth Social,' Bloomberg News reported on the 2nd (local time).

According to the report, Trump filed a lawsuit on the 24th of last month at a Florida district court against Andy Litinsky and Wes Moss, co-founders of the parent company of Truth Social, 'Trump Media & Technology Group (TMTG)'.

[Image source=Reuters Yonhap News]

Trump claimed that Litinsky and Moss caused damage to the company by failing to establish an appropriate governance structure for TMTG and to find a suitable merger partner. He also emphasized that since the two violated contractual terms related to the company's establishment, they are not entitled to the 8.6% stake worth approximately $606 million allocated to them.

Prior to this lawsuit, Litinsky and Moss also filed a lawsuit against Trump at the Delaware Court of Chancery (which handles property disputes) regarding shares. In their complaint, the two founders alleged that Trump planned to issue millions of new shares to dilute their holdings.

This legal dispute arose amid recent sharp fluctuations in TMTG's stock price. After rising about 50% since its listing on the 26th of last month, TMTG's stock price plunged nearly 20% on the 1st following news that the company recorded an operating loss of approximately 80 billion won last year. As a result, the value of Trump's shares reportedly fluctuated by more than $1 billion in a single day, according to the news agency. According to TMTG disclosures, Trump currently holds a 57% stake in TMTG.

In the market, it is expected that Trump, facing astronomical legal costs due to judicial risks, will move to sell TMTG shares. However, in principle, Trump cannot sell shares for six months after the listing. Therefore, it is predicted that he will seek ways to monetize his shares through the TMTG board of directors, which is composed of his close associates.

Meanwhile, on the New York Stock Exchange that day, TMTG's stock closed at $51.60, up 6% from the previous session. The value of Trump's holdings is estimated to be about $4 billion (approximately 5.4 trillion won) based on the closing price that day.