Trump Sues Truth Social Co-founders Over Alleged Mismanagement
Former US President Donald Trump has initiated legal action against the co-founders of the social media platform Truth Social. Accusing them of mishandling the platform’s affairs, Trump insists that they should forfeit their stock in the company. The IPO of Truth Social commenced on March 26.
Legal Action Against Truth Social Co-founders
Trump Media & Technology Group Corp. filed a lawsuit in a Florida state court last week against executives Wes Moss and Andy Litinsky. Both Moss and Litinsky had appeared as contestants on Trump’s NBC show “The Apprentice.”
The lawsuit alleges that the executives’ errors resulted in delays in the company’s IPO process. Trump Media & Technology Group Corp. contends that these mistakes impeded the platform’s progression towards becoming publicly traded.
Financial Setback for Trump Media & Technology Group Corp.
Following a lavish stock market debut, recent financial disclosures reveal substantial losses for Donald Trump’s social media company. Trump Media & Technology Group Corp. reported a loss of nearly $58.2 million in 2023, a stark contrast to the $450.5 million profit reported for 2022.
Moss and Litinsky proposed the concept of Truth Social to Trump after the former president faced a ban from Twitter (formerly known as X) following the Capitol Hill riots in January 2021. Trump’s support was instrumental in the inception of Truth Social, according to the lawsuit.
Trump’s Allegations
The lawsuit contends that “Without President Trump, Truth Social would have been impossible.” It further accuses the executives of leveraging Trump’s influence for their own gain, as reported by NBC.
Challenges in Establishment and IPO Process
According to a Bloomberg report, Moss and Litinsky encountered difficulties in establishing corporate governance for the new company. Additionally, they struggled to identify a special purpose acquisition company (SPAC) capable of facilitating the company’s transition to public trading.
Financial Performance and Stock Volatility
Despite an initial surge in stock value, Trump Media’s shares experienced volatility in the days following their debut. After briefly surpassing $79, the stock price has since retreated closer to its initial offering price of $49.95. As of midday Monday, Trump Media’s stock was down over 18%, trading at just over $50.
The legal dispute between Donald Trump and the co-founders of Truth Social underscores the challenges faced by the social media platform in its journey towards public trading. Financial setbacks and allegations of mismanagement have cast a shadow over Truth Social’s IPO process, highlighting the complexities of navigating the intersection of politics and technology in the modern era.
Read more: Marketing News, Advertising News, PR and Finance News, Digital News.
