Short-seller Iceberg Research unveiled a bearish position on the DWAC stock market on Monday.
Digital World Acquisition Corp. Cl A (NASDAQ: DWAC) stock was at around $86.52, up 3.17%, during Tuesday’s premarket trading session. DWAC stock closed yesterday, October 25, 2021, trading at $83.86, down 10.98%. Notably, the ‘TRUTH Social’ related stock market has gained approximately 741% in the past five days.
The blank check company entered into a definitive merger agreement with Trump Media & Technology Group (TMTG) last week. The duo noted that they are on a journey to dethrone Silicon Valley’s leading technology companies like Twitter Inc (NYSE: TWTR), and Facebook Inc (NASDAQ: FB).
DWAC Overview
Backed by the real estate Billionaire and the former United States President Donald J Trump, Digital World Acquisition Corp has a market capitalization of approximately $3.39 billion.
Notably, the outstanding shares for DWAC are approximately 28.75 million following last week’s merger.
Trump seeks a platform to air his opinions after he was banned from popular social media platforms including Twitter. “I am excited to send out my first TRUTH on TRUTH Social very soon. TMTG was founded with a mission to give a voice to all. I’m excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!” Trump noted during the announcement last week.
Reportedly, DWAC set aside some cash to see through the company’s future growth prospects. “Digital World was formed to create public shareholder value and we believe that TMTG is one of the most promising business combination partners to fulfill that purpose. DWAC currently has $293 Million in trust, assuming minimal redemptions, which can fuel TMTG’s scale-up, including providing class-leading technology services to build strong and secure social networks and diverse media offerings,” Patrick F. Orlando, Chairman/CEO of DWAC, stated during the announcement made last week.
Side Notes on DWAC Stock
After having an awesome takeoff, the deal has begun losing its initial hype following different analysts’ perspectives. Short-seller Iceberg Research unveiled a bearish position on the DWAC on Monday, saying that investors face uncertainties in this blank-check deal as Trump could become a dominant shareholder after the merger.
“Now that initial excitement has passed, we see only risks for investors in the near future. Based on Trump’s track record, at the current price, renegotiation is likely to keep more of the merged company for him,” Iceberg Research said in a tweet. “SPAC holders don’t own a piece of this project yet. Trump has leverage, not them.”
Investors will be keen on checking how the TRUTH Social gains ground in the coming few years, particularly during the next presidential election.
next