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Just when you thought the stars were finally aligning for the long-delayed merger between the SPAC Digital World (DWAC) and Truth Social’s parent entity, Trump Media and Technology Group (TMTG), the former US President’s associates have thrown a wrench into those elaborately laid out plans by lobbing a high-profile lawsuit that could threaten the public market debut of Trump’s media-focused entity.
As we reported a few weeks back, Digital World announced via a new filing on the 16th of February that the much-anticipated meeting of its shareholders would occur at 10:00 a.m. on the 22nd of March, 2024, where those shareholders would be required to officially approve the proposed business combination with the Trump Media and Technology Group, paving the way for the shares of the combined entity to start trading on the Nasdaq exchange.
These plans, however, have now been spoiled by a new lawsuit from the co-founders of Trump Media and Technology Group, who allege that the former US President deliberately maneuvered to deprive them of a significant stake in TMTG that could have been worth hundreds of millions of dollars. Specifically, Andy Litinsky and Wes Moss, who know Trump from his days of hosting the reality show “The Apprentice” and take the credit for originally pitching the idea of a tech startup to the former US President, claim that their original 8.6 percent stake in TMTG is now subject to significant dilution via an “11th hour, pre-merger corporate maneuvering” that has increased the amount of authorized stock from 120 million shares to 1 billion shares. Trump’s attorneys claim that the duo’s original services agreement with TMTG has already been voided.
Bear in mind that the former US President is set to receive 78.75 million shares in the post-merger setup, which is potentially worth over $3 billion.
This lawsuit appears to be a response to an earlier filing by the SPAC against its former CEO, Patrick Orlando, and the sponsor Arc Global Investments II, wherein Digital World alleged that Orlando had threatened to block the proposed merger between DWAC and TMTG to “obtain a windfall by way of extortion.” Of course, Arc Global has also filed its own lawsuit against the SPAC in the Delaware Court of Chancery, alleging that Digital World’s current CEO, Eric Swider, and three other board members had miscalculated Arc’s stake in a manner that would deprive it over 2 million shares.
🌙 $DWAC $TMTG $DJT
🚀 #DWAC #TMTG #DJT
🤑 #ThinkLikeABillionaireNOBODY is Selling Out, but nice try CareBears 😆🖕
Trump when Questioned about it: ”I’m not gonna make [$Billions], I mean I own something that became Very Valuable” https://t.co/s9Y0sLUxuy pic.twitter.com/PwDqmyI46o
— MAGA (@6T9) March 1, 2024
As this three-way lawfare continues, Trump has asserted that Truth Social is “better than anything” and that he is not going to make billions of dollars from this deal. Nonetheless, the former US President contends that he owns “something that became very valuable,” alluding to the massive windfall that he is set to receive if the merger proceeds as planned.