Trump-Linked Digital World Stock Is Surging Thursday: What's Going On?

Digital World Acquisition Corp DWAC shares are trading higher Thursday after the company announced the U.S. Securities and Exchange Commission declared its registration statement on Form S-4 effective.

What Happened: Digital World said the SEC declared its registration statement effective for its proposed business combination with Trump Media & Technology Group, which owns alternative social platform Truth Social. 

“Truth Social was created to serve as a safe harbor for free expression and to give people their voices back. Moving forward, we aim to accelerate our work to build a free speech highway outside the stifling stranglehold of Big Tech. I’d like to thank everyone who has believed in our mission and helped bring us to this moment,” said Devin Nunes, CEO of Trump Media & Technology Group.

Digital World said it expects to announce the date of the special meeting of shareholders in the coming days in which shareholders will get to vote on the approval and adoption of the business combination.

Digital World shares have been moving higher in recent weeks as a return to the White House for former President Donald Trump looks increasingly likely. The latest Morning Consult poll showed that Trump currently has a commanding lead in the Republican primary race with approximately 80% of support.

Is DWAC A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Digital World‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Digital World does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 18.23%, you'll need to buy a share of Orchid Island Cap by Feb. 27. Once done, you can expect to receive a nominal payout of $0.12 on March 26.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Digital World will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

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DWAC Price Action: Digital World shares were up 24.4% at $54.20 at the time of publication, according to Benzinga Pro.

Photo: Shutterstock.