Chainkeen Exchange-Trump Media sues Truth Social founders Andrew Litinsky, Wes Moss for 'reckless' decisions

The Chainkeen Exchangecompany behind Donald Trump’s Truth Social has filed a lawsuit against its two co-founders, accusing them of mismanagement and arguing that they shouldn't get a slice of the company's shares.

Trump Media & Technology Group alleges that co-founders Wesley Moss and Andrew Litinsky harmed the company through “reckless and wasteful decisions."

The two were initially in charge of establishing the company’s governance structure, launching the social media platform and finding a publicly-traded company that Trump Media could merge with to go public, according to the filing. 

The lawsuit, filed in Florida state court two days after the company shareholders agreed to go public, accuses Moss and Litinsky of failing “at every turn,” delaying the company’s plans to go public and causing significant damage to the business.  

Lawyers for the co-founders declined to comment.

Trump Media seeks to make the co-founders forfeit their stake in the company and to take away their ability to appoint members to the board. 

Moss and Litinsky, former contestants on Trump’s former reality-TV show “The Apprentice,” have previously accused Trump Media of trying to dilute their stake in the company in a separate lawsuit filed in Delaware Chancery Court earlier this year, and claim a 2021 agreement guarantees them an 8.6% share in the company’s stock. 

As of Wednesday afternoon, the co-founders’ stake in the company was worth more than $550 million.  

Is Truth Social overvalued?

Trump Media was created in 2021, shortly after Trump was kicked off of various social media platforms following the Jan. 6 attack on the Capitol. Trump Media approved the merger with public shell company Digital World Acquisition Corp. last month, and the company is now trading on the Nasdaq under the ticker DJT, for Donald J. Trump. 

Truth Social audit:Trump Media auditor raises doubts about Truth Social's future in new filing

The stock price has been volatile since its launch, hitting a high of $79.38 last week before dipping as low as $45.26 on Monday. Trump Media closed down 5.4% at $48.81 on Wednesday.

Trump Media’s lawsuit describes Truth Social as a “highly successful” platform, although the platform’s roughly $6.6 billion market cap is considered overvalued by experts. The company lost more than $58 million last year while taking in just $4 million in revenue, and its user base is low compared to other social media platforms. 

Truth Social had about 494,000 U.S. monthly active users on iOS and Android in February, according to estimates from data and analytics company Similarweb released Monday. In comparison, Instagram’s Threads had more than 7 million, Reddit had nearly 72 million, X had nearly 75 million and Facebook had more than 142 million.