People have good days and bad days, that’s normal life, but few people have a day where they lose $300 million on the New York Stock Exchange. Donald Trump had just that kind of a day on Thursday, ho boy. He is not happy. Just a brief review on how Trump came to be at this place: you know that he had a SPAC (Special Purpose Acquisition Company) and its name is DWAC. (Digital World Acquisition Corp.) DWAC was supposed to merge with Trump Media & Technology Group and become a publicly-traded company. That is Trump’s financial lifeline now, because Trump owns 90% of the Truth Social stock and on paper, at least, this looks like a windfall. However, the two co-founders of Truth Social, once contestants on Trump’s TV show The Apprentice, threw a real monkey wrench into his plans, causing a nearly nine-point plunge on the stock market.
You can see the plunge in the early afternoon, after the “co-founders of former president Donald Trump’s media company filed a lawsuit Wednesday, claiming that Trump and other leaders had schemed to deprive them of a stake in the company that could be worth hundreds of millions of dollars,” according to the Washington Post:
The case is one of three lawsuits filed this week that detail bitter recriminations among people key to the Trump company’s earliest days. The filings will probably serve as the opening salvo in what could be all-out legal warfare ahead of the March 22 shareholder vote on whether to go ahead with the merger.
Pause. If this Truth Social big money mirage evaporates, then Trump seriously has no other deep pocket to reach into other than the RNC. And the RNC has resolutions which prevent him from doing same, which will be voted on March 8. I’m sure that this news, today, is not making either Trump or the RNC rest any easier. Oh and by the by, these are not the only lawsuits in the Truth Social sphere. Pay close attention now, because it gets complicated.
On Tuesday, Digital World and Trump Media sued Digital World’s former chief executive, Patrick Orlando, and its sponsor, Arc Global Investments II, in a Florida court, alleging that Orlando had threatened to block the merger to “obtain a windfall by way of extortion” and accusing him of “avarice [and] incompetence” that had caused “extensive reputational harm.”
On Thursday, Arc filed its own lawsuit, telling a Delaware chancery court that Digital World, its current chief executive, Eric Swider, and three board members had miscalculated Arc’s stake in a way that would deprive it of more than 2 million shares. In a motion to expedite, Arc’s attorneys accused Digital World of “gamesmanship” and “strong-arming tactics” related to the dispute.
Arc, a subsidiary of the Shanghai-based investment firm Arc Capital, provided Digital World’s early funding and is managed by Orlando, whom Digital World’s board fired last year.
The Truth Social co-founders have a partnership, United Atlantic Ventures. Under the original agreement, Trump took 90% of the Truth Social shares, the partnership took 8.6 percent, while an attorney on the deal, Bradford Cohen, was given the remaining 1.4 percent, paperwork filed Wednesday states. But for UAV, there would be no Trump Media and no Truth Social, the filing explains.
UAV launched the Trump Media business, hired employees and raised funding while receiving no “fee or payment for its work,” the motion said. And though Litinsky and Moss left Trump Media that year amid a dispute with its current leadership, UAV retained its shares, according to a SEC filing this month from Digital World.
The filing said that Trump was set to receive 78 million shares in the post-merger company — a stake worth more than $3 billion at Thursday’s share price — and that UAV would receive more than 7 million shares, a stake worth nearly $300 million. “Throughout TMTG’s corporate history,” the motion states, “UAV’s 8.6 percent ownership interest has been recognized and honored.”
But UAV’s attorneys allege in the motion that Trump has recently attempted to “drastically dilute” the partnership’s stake as part of what they called an “11th hour, pre-merger corporate maneuvering” tactic designed to increase the amount of authorized stock, from 120 million shares to 1 billion shares.
UAV’s attorneys wrote that the “dilution scheme” had “no legitimate business purpose” and suggested that Trump and the Trump Media board planned to issue the new shares to “Trump and/or his associates and children,” watering down UAV’s stake to less than 1 percent.
In plain language, Trump is attempting to steal from his partners, from the people who actually made Truth Social into something on the internet, be it ever so humble. This is vintage Trump, defrauding workers and partners.
UAV was “promised 8.6 percent of this company and sadly its business partners are baselessly trying to renege,” said the partnership’s lead attorney, Christopher J. Clark of Clark Smith Villazor, in an interview with The Washington Post describing the lawsuit. “They feel like: We made Truth Social for you. You get 90 percent. But some people just aren’t happy with 90 percent.”
Nope, Trump wants it all. Trump needs it all.
The filing said a UAV representative sent a text message this month to a Trump Media noteholder suggesting that UAV might seek to “enjoin,” or block, the merger. The filing also noted that a UAV attorney had sent a letter to Trump Media threatening “legal action regarding UAV’s alleged rights in TMTG, including, if necessary, an action to enjoin” the merger.
Digital World said in the filing that the legal dispute could prevent or delay the merger deal, “significantly impact” the company’s future performance, or “negatively impact investor confidence and market perception.”
The fact that the stock dropped almost nine points Thursday definitely displays a negative impact, I think that much is clear. And the fact that lawsuits are clouding this merger is not something negligible, it’s something substantial.
A sealed legal complaint was filed in the case late Wednesday. Under Delaware chancery law, it won’t be made public for another five days as both sides discuss potential redactions. A copy of the motion for expedited processing, which outlines the dispute, was publicly visible in court records.
Five days will be next Monday. The clock is ticking on a lot of cases for Trump. Now this case has had the heat turned up. We would say, “If you can’t stand the heat, get out of the kitchen,” but Trump’s not in a kitchen. He’s in a towering inferno of litigation, which he created all by himself. It is truly a marvel to behold.
Bottom line: Don’t expect the Truth Social merger to go through on March 22 with all this going on. And if it had gone through, it would not have yielded a windfall of billions to Trump. That is strictly a construct on paper. Truth Social made about $3 million last year. While that’s a decent amount of money for a start up media company, it is nowhere near the behemoth it was cracked up to be, on a par with Facebook or Twitter.
UAV won’t accept “We can’t pay” line. GUARANTEED. Truth Social is DOOMED.
It’s looking like Dimwit Donny isn’t a billionaire, and might not even be a millionaire, or a thousandaire.
Maybe he’s only a dozenaire?
He’s really poorer than any of his staff are.
Poor Donny really is like his Maga supporters.
Really poor.
Wasn’t like they weren’t warned………in his own words……
……..sorry, no sympathy here guys.
*smirk*
It’s been reported lots of times how much Trump loves doing this bit of schtick. I’ll bet he does because he’s exactly the kind of asshole that likes mocking someone who’s too stupid to get they are the butt of the joke he’s telling.
It never ceases to amaze me that the MAGA goobers who just LOVE to hear him do this bit, and even egg him on DON’T get it that HE is the freaking snake and THEY are the pretty woman!
I would love to hear Mary Trump’s psychological assessment!
He needs to save enough for a trailor on a small parcel of swampland in Florida so he can cut a deal for house arrest. Then he can join his constituents. Doubt those gaudy gold sneakers will work for an ankle monitor. I suggest he pick up a cheap pair of crocs at Walmart. He can also get a cheap case of ketchup and a kid’s meal at McDonald’s there also. America is a great country for home incarceration!
Well actually, since you bring it up. I think Trump should apply for a door greeter position at Walmart. With his new found fortunes I think the extra income might come in handy. He, being a mental genius probably didn’t pay into social security, so he’s probably screwed there anyway.