Trump Just Got Really Good Money News

Gaining an approval that could reshape his financial landscape, former president Donald Trump is poised to potentially gain nearly $4 billion from the merger of Digital World Acquisition Corp (DWAC) and Trump Media & Technology Group, the entity behind his social media platform, Truth Social.

This comes on the heels of a Securities and Exchange Commission (SEC) approval, marking a flashpoint for the former president's campaign and business ambitions amidst swirling rumors of financial strife.

Anthony Scaramucci, Trump's short-tenured former White House Director of Communications, suggested on Wednesday that Trump might be financially strapped—a claim that gains complexity in light of an SEC document filed the same day outlining a merger that would see Trump own at least 58.1 percent of the new entity's shares, translating into a stake valued at approximately $3.95 billion based on current market prices.

Let's break it down. According to the SEC document, Digital World Acquisition Corp, which will be named New Digital World after it goes public (and will be traded on the Nasdaq under the tickers DJT and DJTW), plans to issue up to 135,869,509 shares of common stock when it goes public, pending a shareholder meeting sometime in September of this year.

Trump will hold 58.1 percent of the outstanding shares of New Digital World common stock, according to the SEC filing, which limits or precludes other stockholders' ability to influence the business. That 58.1 percent works out to be 78,940,185 shares.

With the stock trading at $50.05 at the time of writing, that would see the former president earn $3.95 billion.

DWAC, a Special Purpose Acquisition Company (SPAC) or blank check company, was initially established as a vehicle for acquiring or merging with other businesses. Traditionally, SPAC investors are offered two types of securities at the initial public offering (IPO): common stock, usually priced at $10 per share, and warrants, which grant the right to purchase additional shares in the future at a predetermined price, typically $11.50 per share, according to the Harvard Business Review.

However, DWAC transcends the typical SPAC mold, evolving into what Matt Tuttle, the founder of Tuttle Capital Management, terms the "election stock," a designation that points to its unique position between finance and politics, propelled by its association with former president Trump.

Tuttle told Newsweek that he expects unprecedented volatility (price fluctuations) in DWAC's stock as the election approaches, highlighting its status as potentially the most speculative among meme stocks.

"There is going to be tons of volatility...love him or hate him, drama follows and will continue to follow him," Tuttle said to Newsweek.

The SEC's approval comes at an important time for Trump, who has recently been ordered to pay substantial sums in legal judgments and faces ongoing lawsuits with steep financial implications.

While there is a lock-up period for share sales—in this case, it is six months after the merger is complete—Trump could potentially begin to sell part of his stake to the open market. "Hard to say [if he will]," according to Tuttle, but he told Newsweek that it's "certainly a risk."