Judge rejects bid to sanction Truth Social co-founders over stock value

The co-founders of Donald Trump’s social media startup have lost their bid for a Delaware judge to impose financial penalties on the former president and his lawyers for alleged wrongdoing in a lawsuit over the value of their shares.

Andy Litinsky and Wes Moss, who own an 8.6 percent stake in Trump Media & Technology Group Corp., argued the sanctions were warranted because Trump and his team allegedly violated a Delaware court order by filing a separate lawsuit against them in Florida. On Tuesday, Delaware Chancery Court Judge Morgan Zurn disagreed.

At a hearing in Wilmington, the judge said the court order does not bar Trump from suing in Florida and that there is nothing punitive.

Shares of Trump Media have fluctuated wildly since it went public in a merger with a special-purpose buyout company in March. Trump, who owns a majority of the company’s shares, has seen the value of his stake fall by billions of dollars from a post-merger peak as he campaigns to return to the White House.

Shares of Trump Media traded at $21.16 at 11:50 p.m. New York time on Tuesday, near their lowest level since the merger.

Litinsky and Moss — former contestants on Trump’s show The Apprentice — filed the suit in Delaware in February, alleging Trump planned to dilute his stake in the firm. Trump then struck a deal in which he agreed not to block the men from accessing their shares in the company while the case progressed — a deal that was recalled in a court ruling by a Delaware judge.

Trump then filed his own lawsuit against the Florida men. He claims Litinsky and Moss don’t deserve their 8.6 percent stake — once valued at more than $600 million — because they breached an agreement over the Trump Media setup. The fight over sanctions came after Litinsky and Moss said Trump’s Florida lawsuit violated an earlier agreement not to block their access to their shares.

The Florida case is Trump Media & Technology Group v. United Atlantic Ventures, Florida Circuit Court, 12th Judicial Circuit (Sarasota). The Delaware case is United Atlantic Ventures v Trump Media, 2024-0184, Delaware Chancery Court (Wilmington).

Top photo: The Truth Social app on a smartphone set up in New York, U.S., Friday, March 22, 2024. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, have approved a merger agreement with the media business of Trump in a Friday vote. That means Trump Media & Technology Group, whose flagship product is the social media site Truth Social, will soon begin trading on the Nasdaq stock exchange, the AP reported. Photographer: Gabby Jones/Bloomberg.

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