Trump Media Co-Founders Sue Over Stake Dilution

Two co-founders of Trump’s media enterprise, United Atlantic Ventures (UAV), are suing Trump’s media business, alleging an attempt to dilute their stake in the company. Andy Litinsky and Wes Moss, former contestants on “The Apprentice,” filed the lawsuit in Delaware, claiming that Trump Media and Technology Group (TMTG), the parent company of Truth Social, tried to dilute their share amid a potential merger. This merger could provide President Donald Trump with much-needed cash, as he faces a hefty payment to the state of New York following a civil fraud ruling.

Litinsky and Moss pitched the idea of a Trump-branded media startup to Trump in 2021, following his removal from Twitter. They agreed that Trump would receive 90% of the company’s stake, while the pair and their attorney would split the remaining 10% as compensation for their work in starting the company. However, the lawsuit alleges that Trump and other leaders of TMTG recently attempted to dilute UAV’s interests by increasing the amount of authorized stock from 120 million shares to one billion shares.

This “dilution scheme” would reportedly reduce UAV’s stake from 8.6% to less than 1%, with new shares being allocated to Trump, his associates, and children. Litinsky and Moss, who have since left TMTG but retain their shares in the company, argue that this maneuvering represents an unfair attempt to diminish their ownership.

The lawsuit comes amid TMTG’s ongoing merger efforts with Digital World Acquisition Corp (DWAC), a special purpose acquisition company. The merger, announced over two years ago, has faced repeated delays, partly due to a Securities and Exchange Commission (SEC) investigation into potential securities violations. In September, DWAC shareholders voted to grant TMTG a 12-month extension to complete the merger, which could provide Trump with a significant cash infusion.

The timing of the alleged dilution attempt, described as “11th hour, pre-merger corporate maneuvering,” suggests a strategic move by Trump to secure additional funds to cover his debts. Trump reportedly owes more than $450 million to the state of New York for misstating the value of his and the Trump Organization’s assets on financial statements.

UAV’s lawyer stated in the suit that the merger “represents a potential (and perhaps existential) liquidity event for Trump, which may explain his last-minute stock grab.” Litinsky and Moss are seeking to protect their stake in TMTG and ensure that they receive their agreed-upon share of the company, as outlined in their initial agreement with Trump.

The outcome of this lawsuit could have significant implications for both Trump and the future of TMTG, as it seeks to navigate its merger and establish itself in the competitive media landscape.