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SPAC linked to Trump social media venture edges lower as short seller targets

Stock MarketsOct 25, 2021 09:36PM ET
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© Reuters. FILE PHOTO: Former U.S. President Donald Trump speaks during a rally at the Iowa States Fairgrounds in Des Moines, Iowa, U.S., October 9, 2021. REUTERS/Rachel Mummey

(Reuters) - Shares of the blank-check acquisition company that plans to publicly list former U.S. President Donald Trump's new social media venture fell on Monday after an eye-watering rally last week, as a short-seller said it was betting against the company.

Digital World Acquisition, a Miami-based special purpose acquisition company (SPAC), fell 10.98%, its first declining session since announcing Wednesday it would merge with Trump's media company to create a social media app called TRUTH Social.

The stock surged following the announcement and remains up over 700% since the deal was unveiled.

Earlier on Monday, short seller Iceberg Research tweeted https://twitter.com/IcebergResear/status/1452699920641650690 it was betting against the company’s shares.

“We are short $DWAC. 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,” Iceberg Research tweeted.

Iceberg, which publishes a blog with its research on Wordpress, gained attention in 2015 for highlighting what it called aggressive accounting practices at Hong Kong-based commodities trader Noble Group. Noble denied the allegations but subsequently saw its profits collapse and was forced to sell most of its assets.

The company said earlier this year that it was short popular meme stock AMC Entertainment (NYSE:AMC) Holdings.

Digital World Acquisition's recent surge is reminiscent of the meme stock frenzy earlier in 2021, when an army of retail investors on Reddit fueled hyper-rallies in GameStop Corp (NYSE:GME), AMC Entertainment Holdings and other stocks.

Twitter (NYSE:TWTR), Facebook (NASDAQ:FB) and other social media platforms banned Trump from their services after hundreds of his supporters rioted at the U.S. Capitol on Jan. 6.

TRUTH Social is set for a beta launch next month and full rollout in the first quarter of 2022.

SPACs allow private companies to publicly list their shares while sidestepping traditional initial public offerings.

SPAC linked to Trump social media venture edges lower as short seller targets
 

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Comments (5)
John Brown
John Brown Oct 26, 2021 12:56AM ET
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Trump 2024👌👍😎❤️
Mauricio Salinas
Mauricio Salinas Oct 26, 2021 12:56AM ET
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I love it when racists P.O.S. show who they are, go back to the sewer you crawled out of.
EDWARD DURHAM
EDWARD DURHAM Oct 25, 2021 11:40PM ET
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SPOILER ALERT; ICEBERG IS A HOAX INTENDED TO SCARE INVESTORS AND POTENTIAL INVESTORS. ICEBERG DIES NOT EXIST.
bret lafrance
bret lafrance Oct 25, 2021 9:43PM ET
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popular joke stock
Jose Maderno
Jose Maderno Oct 25, 2021 7:40PM ET
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The company said earlier this year that it was short popular meme stock AMC Entertainment (NYSE:AMC) Holdings. --- hmmm... Nice of Reuters to give press time to a short seller, but I would bet money the writer made it all up.
Lesko Brandon
Lesko Brandon Oct 25, 2021 7:40PM ET
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people shorting this are the only reason that it skyrocketed this much in the first place, lots of lefties shorted orange man and went broke. with short positions you can lose over 100% of your short position value...and many did.
Nison Kay
Nison Kay Oct 25, 2021 7:40PM ET
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Lesko Brandon you have no idea what you are talking about 🤡
Nison Kay
Nison Kay Oct 25, 2021 7:40PM ET
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Lesko Brandon this is not a short play. the shorts will get burned.
Lesko Brandon
Lesko Brandon Oct 25, 2021 7:32PM ET
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OMG, down 10% after going up 1000%, clearly Trump is less popular than Brandon.
Nison Kay
Nison Kay Oct 25, 2021 7:32PM ET
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👍
 
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