Shares of Digital World Acquisition Corp (DWAC), the special purpose acquisition which plans to take former President Donald Trump’s social media venture public slid 10% on Monday afternoon after short-seller Iceberg Research announced it was betting against the stock.
“We are short $DWAC,” wrote Iceberg Research in a tweet.
DWAC shares had jumped more than 800% over the span of two sessions last week after Digital World Acquisition announced it was taking Trump Media and Technology Group (TMTG) public. The social media company will create a platform to “standup” against “Big Tech,” according to Trump, chairman of TMTG.
Trump will be receiving a 58% stake in his future public company, according to Bloomberg. Iceberg Research wrote, “Trump will renegotiate, at the expense of $DWAC retail holders,” citing the news report.
The blank check company, which has yet to seek shareholder approval to close on the merger, ballooned to more than $8 billion in valuation on Friday.
The initial press release highlighted the “transaction values Trump Media & Technology Group 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.”
Digital World Acquisition CEO Patrick Orlando told Reuters a regulatory filing with more details on the merger will be published “soon.”
Shares of Digital World Acquisition closed at $83.86 on Monday.