Trump Media may generate more revenue for lawyers than itself

Trump Media & Technology Group (TMTG) may not be generating much revenue for itself (under $1M last quarter), but it certainly is generating attorney fees as seemingly everyone involved with the company is suing each other. Additionally, two TMTG investors just pleaded guilty to securities fraud. A recap of the legal proceedings surrounding the hottest new meme stock:

In 2021, days after President Trump left the White House, Andy Litinsky and Wes Moss, two former contestants on Donald Trump’s reality TV show, The Apprentice, pitched the former president on the idea of building a conservative media network. The parties agreed that a SPAC merger could provide the funding needed to scale the company, and in November, TMTG announced that it was going public through a reverse merger with Digital World Acquisition Corp, a roughly $300 million SPAC led by CEO and Chairman Patrick Orlando.

On February 28, 2024, United Atlantic Ventures, a partnership between Litinsky and Moss, sued to block TMTG’s merger with DWAC, claiming that Trump was attempting to dilute them from an 8.6% stake in the company to less than 1%.

One day later, ARC Global Investments II, which is controlled by Patrick Orlando, sued to block the merger until Orlando received a larger payout. Orlando was fired by the firm in March 2023, as DWAC’s board cited “unprecedented headwinds” necessitated a leadership change.

On March 20, 2024, Digital World Acquisition Corp sued ARC to force Orlando, still the largest shareholder of DWAC, to vote to approve the merger.

Trump countersued Litinsky and Moss in a separate Florida lawsuit on March 24, claiming they failed to set up a proper corporate governance structure or find an appropriate merger partner, therefore they don’t deserve their 8.6%, $606 million stake.

Oh, and if these weren’t enough legal issues to keep track of, in unrelated, non-lawsuit matters, Michael Shvartsman, head of Miami-based venture capital firm Rocket One Capital, and his brother Gerald Shvartsman pleaded guilty to insider trading involving DWAC. In June 2021, before DWAC IPO’d, they were approached about becoming early investors in the SPAC. Upon learning that DWAC would likely be taking Trump Media public, they acquired shares in the SPAC, selling them upon merger news for a $22 million profit. Rocket One’s CIO, Bruce Garelick, is scheduled to face trial on related charges on April 29th.

TL;DR:

• Trump Media’s co-founders sued Trump for attempting to dilute their shares

• Trump countersued, claiming they don’t deserve their shares

• DWAC’s former CEO sued the SPAC for more compensation

• DWAC sued its former CEO to force him to vote to approve the merger deal

• Two investors (so far) have pleaded guilty to securities fraud for insider trading tied to DWAC; another exec will face trial soon

So regardless of how the stock moves, the biggest winners of $DJT might just be the attorneys involved on both sides.