Donald Trump is returning to the stock market, and the former president stands to reap a sizeable payout in the process.

Shareholders of Digital World Acquisition, a publicly traded shell company, approved a deal to merge with Trump’s media business in a vote on Friday.

That means Trump Media & Technology Group, whose flagship product is social networking site Truth Social, will soon begin trading on the Nasdaq stock market.

Trump is set to own most of the combined company, or nearly 79 million shares. Multiply that by Digital World’s closing stock price Friday of $US36.94, and the total value of his stake could be nearly $US3 billion ($A4.6 billion).

The green light arrives at a time the presumptive Republican presidential nominee is facing his most costly legal battle to date: a $US454 million judgment in a fraud lawsuit.

But Trump won’t be able to cash out the deal’s windfall immediately, unless the company’s board makes changes to a “lock-up” provision that prevents company insiders from selling newly issued shares for six months.

Trump’s presidential campaign did not immediately respond to request for comment.

When a publicly traded shell company agrees to buy a private company, the target company takes its place on a stock exchange once the combination is approved by shareholders. If recent activity in Digital World’s stock is any indication, shareholders of Trump Media could be in for a bumpy ride.

Many of Digital World’s investors are small-time investors who are either fans of Trump or trying to cash in on the mania, instead of big institutional and professional investors.

Those shareholders helped the stock more than double this year in anticipation of the merger going through. But on Friday, the shares lost almost 14 per cent.

Trump’s earlier foray into the stock market didn’t end well. Trump Hotels and Casino Resorts went public in 1995 under the symbol DJT – the same symbol Trump Media will trade under.

By 2004, Trump’s casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.

Ahead of Friday’s approval, Digital World’s regulatory filings listed many of the risks its investors face, as well as those of the Truth Social owner once Trump Media also goes public.

One risk, the company said, is that Trump would be entitled to vote in his own interest as a controlling stockholder – which may not always be in the interests of all shareholders.

Digital World also cited the high rate of failure for new social media platforms, as well as Trump Media’s expectation that it would lose money on its operations “for the foreseeable future”.

This post was originally published on Michael West.