TruthSocial, the social media site the former president retreated to when he was kicked off mainstream options, is struggling after going public.
The DJT stock, representing Donald Trump’s media company, is still falling precipitously, and the news could get even worse for the former president. Currently, there’s a rule in place that prevents him from selling his own shares, and that also applies to some other early investors in the failing company.
Two co-founders, Wesley Moss and Andrew Litinsky, who say they initially pitched the idea of the site to Trump — then claim that they got cheated on stock shares — are now seeking to escape their connection to that investment. They had already filed a lawsuit, claiming that Trump cheapened the value of the shares they took as compensation instead of a paycheck.
Now they say they should be permitted to sell the stock before the pre-arranged 6-month mark, the same point at which Trump is allowed to dump his shares. Barron’s reports:
“In the latest development Moss and Litinsky have now amended their lawsuit to also seek to be able to sell their shares in Trump Media ahead of the expiration of a six-month lockup period.”
Trump also countersued to demand that they surrender the stock they own, blaming them for the delays in taking the site public. The two co-founders seek an injunction to stop that lawsuit.
It seems the two disgruntled partners are now willing to be rid of the stock, but “co-founders seeking permission to sell their shares” is not a great look for a company, and could drive the value even lower, both directly (if they receive permission to sell) and indirectly, by scaring off other investors.
Trump’s company is making that argument in response to the filing. Newsweek reported:
“Attorneys for Trump Media argued that the enforcement of share lockups is a standard practice in transactions involving companies like Digital World Acquisition Corp (DWAC), the report said, and that permitting the co-founders to sell off their shares prematurely would negatively impact both the company and its other shareholders.”
Trump’s dropping stock price has already cost him, with the merger first placing him on the Bloomberg 500 list, then the drop in value removing him from it again.
If he should decide to request a dispensation from the company’s board (packed with family and supporters, including his son Donald Trump Jr. and former Congressman Devin Nunes) and dump his own before it drops further, it could be the beginning of the end for TruthSocial.
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