Boca Raton, Florida – Former President Donald Trump has filed a lawsuit against two co-founders of his social media platform, Truth Social. The lawsuit, initiated by Trump Media & Technology Group (TMTG), alleges that the co-founders, Andy Litinsky and Wes Moss, made detrimental decisions that led to a decline in the company and its stock prices after it went public in March.
According to the lawsuit, Litinsky and Moss failed to handle day-to-day operations effectively, neglected to establish the corporate governance structure for Trump Media, and did not launch the Truth Social platform as planned. As a result, TMTG contends that Litinsky and Moss should forfeit their 8.6 million shares in the company.
Litinsky and Moss had previously filed a lawsuit against Trump in Delaware, claiming that TMTG was trying to dilute their shares. The legal battle between the co-founders reflects the turbulence surrounding Truth Social’s initial public offering and subsequent fluctuations in its stock prices.
Following the merger of TMTG with Digital World Acquisition Corp, Truth Social’s stock initially saw a surge in value. However, after the company’s financials were made public, share prices plummeted, signaling a challenging road ahead for the social media platform.
Filings with the U.S. Securities and Exchange Commission revealed significant losses for Truth Social, with a net loss of $58.2 million in 2023 and over $50 million in 2022. Despite generating approximately $5.4 million in gross profit over two years, the company faces financial struggles in light of its mounting losses.
Although Trump is barred from selling his shares for six months, the valuation of Truth Social remains a critical factor in his efforts to address mounting legal expenses from various civil and criminal cases. The outcome of the lawsuit and the platform’s performance in the coming months will determine the future trajectory of Truth Social and its stakeholders.
In the midst of legal disputes and financial challenges, the fate of Truth Social hangs in the balance, highlighting the complexities of launching a new social media platform in a competitive and rapidly evolving digital landscape. As the legal battle unfolds, stakeholders and observers await further developments that will shape the narrative of Truth Social and its place in the broader social media ecosystem.