Trump Launches Shocking Lawsuit Against His OWN

OPINION:  This article contains commentary which may reflect the author’s opinion

A lawsuit has been filed by former president Donald Trump against two co-founders of the Trump Media & Technology Group Corp. The business is the parent firm of Truth Social, a social networking platform that just went public.

The case, which was submitted to a Florida state court on March 24, claims that the two co-founders, Andy Litinsky and Wes Moss, misformed the company’s incorporation and are therefore ineligible to own any stock. Trump’s legal team contended that Litinsky and Moss should not be allowed to retain their 8.6% ownership, which is worth a staggering $606 million, because they broke the rules of the company’s establishment.

Nonetheless, the legal dispute is not a one-sided one. Previously, Litinsky and Moss sued Trump in Delaware Chancery Court, arguing that they were promised a share in the social media corporation but never received it.

The erratic performance of Trump Media’s stock heightens the drama. Following the stock’s merger with a special purpose acquisition company (SPAC), there have been erratic swings. A worrying $58 million loss for the company in 2023 was revealed in a recent securities filing, along with a “relative trickle of revenue.”

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The stock value fell by 21% as a result of the financial report and a warning that SPAC transaction funds were required for the company to continue operating. The stock price did, however, make a partial comeback the next day, rising 6.1% in late New York trade.

Last week’s financial phenomenon attracted the attention of both investors and critics of the former president by driving the share price of Trump’s media corporation to an astounding 2,000 times its revenue. Some have suggested that the company’s value stems more from investments in Trump’s political future and brand than from its sound financial principles.

With trade generating a $6 billion increase in his net worth, Trump—who has a 78% share in the company—saw the largest one-day return of his career. Tuesday morning’s opening price for the shares was $78 per share. Analysts are keeping an eye on the business fundamentals of Trump’s enterprise, stating that in order to maintain the high valuation, the company needs to boost its quarterly revenues.

With $3.4 million in revenue during the first nine months of 2023, Trump Media offered Truth Social an excellent opportunity for advertising. The stock is among the most actively traded, per Trade Alert data. Social media posts imply that some of Trump’s backers have invested in TMTG. But speculators looking for fast money seem to be driving a large chunk of the trade volume.

On Monday, the stock saw substantial volatility, losing about 20% of its value. This comes after Trump successfully obtained a $175 million bond payment late on Monday night, averting the state attorney general’s possible seizure of skyscrapers, golf courses, and other assets in New York.

It’s unknown if hedge funds and other Wall Street organizations will take similar risks and take part in the GameStop-style run, as major financial firms are required to reveal any stakes in TMTG by the end of March.

 

 

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