FILE PHOTO: Former US President Donald Trump speaks at a rally at the Iowa State Fairgrounds on October 9, 2021 in Des Moines, Iowa, USA. Reuters / Rachel Mommy
26 October 2021
(Reuters) – Shares of the Blank Check acquisition company, which plans to list former US President Donald Trump’s new social media venture, fell on Monday after a spectacular rally last week. ..
Miami-based special purpose acquisition company (SPAC) Digital World Acquisitions, fell 10.98%. This is the first reduction session since Wednesday when it announced that it would merge with Trump’s media company to create a social media app called Truth Social.
The stock price has skyrocketed since the announcement and the transaction continues to rise by over 700% since the announcement.
Earlier on Monday, short selling Iceberg Research tweeted https://twitter.com/IcebergResear/status/1452699920641650690.
“We are short of $DWAC. Now that the initial excitement has passed, we will only see risk for investors in the near future. Based on Trump’s performance, at current prices, by renegotiating, multiple companies are likely to retain his post-merger,” Iceberg Research tweeted.
Iceberg, who blogs about WordPress research, attracted a lot of attention in 2015 by emphasizing aggressive accounting practices at Hong Kong-based commodity trader Noble Group. Noble denied the claim, but then profits fell, forcing him to sell most of his assets.
Earlier this year, the company said it was short on popular meme stock, AMC Entertainment Holdings.
The recent surge in Digital World acquisitions is reminiscent of the meme stock frenzy of early 2021, where Reddit’s army of retail investors fueled a hyper rally of GameStop Corp., AMC Entertainment Holdings and other stocks.
Twitter, Facebook and other social media platforms have banned Trump’s service after hundreds of supporters rioted at the US Capitol on January 6.
Truth Social will release the beta version next month and will be fully rolled out in the first quarter of 2022.
SPAC allows private companies to go public on their shares while avoiding the traditional initial public offering.
(Reporting by Noel Randwich; Editing by Ira Iosbashvili and Chris Reese)
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