By Rob McLean and Jill Disis, CNN Business
The shell company that plans to merge with former US President Donald Trump’s new media firm is losing some steam after last week’s trading bonanza.
Shares of Digital World Acquisition Corp. plunged nearly 30% Tuesday after falling 11% on Monday.
Digital World Acquisition Corp. skyrocketed by as much as 1,657% last week after Trump announced on Wednesday a deal to list Trump Media & Technology Group through what’s known as a SPAC, or a Special Purpose Acquisition Company.
Digital World Acquisition Corp. is listed on the Nasdaq. It’s a blank check company that exists solely to merge with private firms to take them public.
After Trump’s announcement, the company’s shares took off: They finished up 357% on Thursday, and climbed even higher on Friday, hitting an intraday peak of $175 before backing off somewhat. Shares of the firm ended up more than 845% for the week.
Not everyone is excited by the deal, though. Iceberg Research tweeted Monday that it sees “only risks” for investors in the near future “now that initial excitement has passed.”
“Based on Trump’s track record, at current price, renegotiation is likely to keep more of the merged company for him,” the firm tweeted, adding that it is shorting the stock. It added that while it doesn’t have an opinion on how successful Trump’s venture will be, “SPAC holders don’t own a piece of this project yet.”
“Trump has leverage, not them,” the company said.
— Matt Egan contributed to this report.
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