Trump Media Faces Lawsuit Over Alleged Share Dilution Scheme
President Trump’s media company, Trump Media & Technology Group, is facing a lawsuit from its co-founders, Andy Litinsky and Wes Moss. Litinsky and Moss claim that they were targeted by a scheme to dilute their shares in the company before a billion-dollar merger. The lawsuit was filed in the Delaware Court of Chancery by United Atlantic Ventures (UAV), the partnership founded by Litinsky and Moss.
The co-founders pitched the idea of starting a social media platform to President Trump in February 2021, after he was banned from Twitter. Litinsky, Moss, and attorney Bradford Cohen were initially given a 10 percent stake in the company, while President Trump received 90 percent. Litinsky and Moss later left Trump Media, but UAV retained its 8.6 percent stake.
According to a document filed with the U.S. Securities and Exchange Commission, President Trump is set to receive 78 million shares in the post-merger company, which could be valued at more than $3 billion. UAV would receive 7.5 million shares, worth over $300 million. However, UAV alleges that President Trump and other company leaders attempted to dilute UAV’s interests by increasing the amount of authorized stock from 120 million shares to one billion. This alleged scheme would reduce UAV’s stake to less than 1 percent.
UAV is represented by Christopher Clark, a Washington lawyer who has advised Elon Musk and Hunter Biden. Clark stated that his clients did the work in creating Truth Social and now President Trump does not want to pay them. The lawsuit aims to prevent the dilution of UAV’s shares and protect their stake in the company.
The merger between Trump Media and Digital World Acquisition, a shell company created for the sole purpose of acquiring Trump Media and taking it public, is highly anticipated. The stock price of Digital World Acquisition has seen a significant increase of 136 percent since the beginning of the year. If approved by Digital World shareholders in March, the merger could provide much-needed relief for President Trump, who has faced financial pressure due to court rulings against him.
Recently, two separate judges ordered President Trump to pay over $540 million in total. One ruling found that President Trump and his co-defendants owe more than $355 million to the state of New York for fraudulently overstating their assets on financial documents. In another ruling, President Trump was ordered to pay $83.3 million to E. Jean Carroll for defamation. These financial challenges have put increased pressure on President Trump’s finances.
President Trump has maintained that these rulings are part of a larger conspiracy by Democrats to financially drain their political enemies. He has voiced his frustration on his social media platform, Truth Social, where he claimed that the New York State conspiracy against him is the greatest and most dangerous political hoax in the history of the country.
Forbes estimates President Trump’s net worth to be around $2.6 billion as of September 2023. This includes an estimated $426 million in cash and liquid assets, which may not be enough to cover the fines imposed by the court rulings.
The outcome of the lawsuit filed by UAV will determine the extent of Litinsky and Moss’ stake in Trump Media & Technology Group. The allegations of a share dilution scheme add another layer of complexity to the already high-profile merger between Trump Media and Digital World Acquisition. As the legal battle unfolds, all eyes will be on the Delaware Court of Chancery to see how it will impact President Trump’s media empire and his financial standing.
