The particular function acquisition firm that plans to take former President Donald Trump’s media enterprise public is now the goal of short-seller Iceberg Research — regardless of the inventory’s big rally final week.
The agency introduced its guess in opposition to the Trump SPAC, Digital World Acquisition Corp., in a sequence of tweets Monday, saying Trump may search to safe a greater deal for his media firm in a renegotiation of the merger.
“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.”
“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 agency added in a second tweet.
The SPAC — a so-called blank-check firm that’s fashioned and goes public to lift cash to fund an acquisition of a personal firm, which can then take its place on the markets — introduced Wednesday night that it plans to merge with Trump’s new social media firm.
The inventory soared greater than 1,000 % within the days following the announcement, pushed largely by curiosity from novice merchants.
Shares of the SPAC completed buying and selling Monday practically 11 % decrease after Iceberg introduced it was betting in opposition to the inventory, however the inventory’s nonetheless up greater than 500 % since earlier than the merger with Trump’s media firm was introduced.
Shares of DWAC have been greater than 5 % increased in premarket buying and selling on Tuesday.
In a earlier tweet, Iceberg on Sunday shared an article from Bloomberg that famous Trump may nonetheless renegotiate the small print of the merger.
“Which means Trump will renegotiate, at the expense of $DWAC retail holders,” Iceberg tweeted.
Trump’s newly fashioned firm, Trump Media & Technology Group, mentioned final week it plans to roll out a brand new social community, dubbed TRUTH Social, which is ready to launch in beta for “invited guests” subsequent month and are available on-line nationwide within the first three months of 2022.
Its mission is to “create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America,” it mentioned.
The merger deal would worth TMTG “at an initial enterprise value of $875 Million, with a potential additional earnout of $825 Million in additional shares (at the valuation they are granted) for a cumulative valuation of up to $1.7 Billion depending on the performance of the stock price post-business combination,” in keeping with the Wednesday press launch.