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- Short-seller Iceberg Research said it is shorting shares of the SPAC set to merge with Trump's media company.
- Iceberg said Trump still has all the leverage and that SPAC shareholder don't own any part of the company yet.
- Shares of the SPAC, Digital World Acquisition Corp., slumped Monday.
The SPAC set to bring Trump's media company public has already drawn a short-seller's attention after an epic run last week.
Iceberg Research said in two tweets Monday that it was betting against Digital World Acquisition Corp., the blank-check company that announced plans to merge with Trump Media & Technology Group last week.
"We are short $DWAC," Iceberg said in a tweet. "Now that initial excitement has passed, we see only risks for investors in near future. Based on Trump's track record, at current price, renegotiation is likely to keep more of the merged company for him."
In a second tweet, the short seller said, "No opinion on the probability of success of TMTG. But SPAC holders don't own a piece of this project yet. Trump has leverage, not them." The tweets offered a word of caution specifically to retail investors.
'Trump will renegotiate at the expense of DWAC retail holders," the firm said, referring to a report from Bloomberg Monday that said Trump could still seek new terms after the market cap of the stock soared past the $875 million that was originally agreed to by the SPAC and Trump's media venture.
Shares of Digital World Acquisition Corp. receded Monday, falling as much as 12% to $82.61. That's a drop from the stock's high last week of $157.50.
Considering the stock's epic two-day rally and its massive retail-trader following, Trump's media company may have shot into the meme-stock ranks among other well-known companies like GameStop and AMC. Iceberg has been vocal on Twitter about its bet against AMC as well.
A representative from Trump Media & Technology Group did not immediately respond to Insider's request for comment.
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October 26, 2021 at 02:41AM
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A short-seller says the party is over for Digital World Acquisition Corp. after stunning rally, and that Trump, not the SPAC shareholders are in control - Business Insider
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