A short seller says the party is over for Digital World Acquisition Corp. after a stunning rally, and that Trump, not the SPAC shareholders, is in control

• Iceberg Research said it was shorting shares of the SPAC set to merge with Trump's media company.
• It said Trump had all the leverage and SPAC shareholders didn't yet own any part of the company.

The special-purpose acquisition company set to bring former President Donald Trump's media firm public has already drawn a short seller's attention after an epic run last week.

Iceberg Research said in two tweets Monday that it was betting against Digital World Acquisition Corp., the blank-check company that announced last week plans to merge with Trump Media & Technology Group.

"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."

In a second tweet, the short seller said: "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 tweets offered a word of caution to retail investors specifically.

'Trump will renegotiate at the expense of DWAC retail holders," the firm said, referring to a report from Bloomberg Monday that said Trump could still seek new terms after the market cap of the stock soared past the $875 million the SPAC and Trump's media venture originally agreed to.

Shares of Digital World Acquisition Corp. receded Monday, falling as much as 12% to $82.61. That's a drop from the stock's high last week of $157.50.

Considering the stock's epic two-day rally and its massive retail-trader following, Trump's media company may have jumped into the meme-stock ranks among other well-known companies like GameStop and AMC. Iceberg has been vocal on Twitter about its bet against AMC as well.

A representative from Trump Media & Technology Group did not immediately respond to Insider's request for comment.