#Trump SPAC targeted by Iceberg Research after massive rally

The special purpose acquisition company that plans to take former President Donald Trump’s media venture public is now the target of short-seller Iceberg Research — despite the stock’s huge rally last week.

The firm announced its bet against the Trump SPAC, Digital World Acquisition Corp., in a series of tweets Monday, saying Trump could seek to secure a better deal for his media company 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 firm added in a second tweet.

The SPAC — a so-called blank-check company that’s formed and goes public to raise money to fund an acquisition of a private company, which will then take its place on the markets — announced Wednesday evening that it plans to merge with Trump’s new social media company.

The stock soared more than 1,000 percent in the days following the announcement, driven largely by interest from amateur traders.

Shares of the SPAC finished trading Monday nearly 11 percent lower after Iceberg announced it was betting against the stock, but the stock’s still up more than 500 percent since before the merger with Trump’s media company was announced.

Shares of DWAC were more than 5 percent higher in premarket trading on Tuesday.

In a previous tweet, Iceberg on Sunday shared an article from Bloomberg that noted Trump could still renegotiate the details of the merger.

“Which means Trump will renegotiate, at the expense of $DWAC retail holders,” Iceberg tweeted.

Trump’s newly formed company, Trump Media & Technology Group, said last week it plans to roll out a new social network, dubbed TRUTH Social, which is set to launch in beta for “invited guests” next month and come online nationwide in 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 said.

The merger deal would value 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,” according to the Wednesday press release.