April 23 (Reuters) - Donald Trump is set to secure on

Tuesday a stock bonus worth $1.3 billion from the company that

operates his social media app Truth Social, equivalent to about

half the majority stake he already owns in it, thanks to the

wild rally in its shares.

The award will take the former U.S. President's overall

stake in the company, Trump Media & Technology Group ( DJT )

, to $4.1 billion.

While Trump has agreed not to sell any of his TMTG shares

before September, the windfall represents a significant boost to

his wealth, which Forbes pegs at $4.7 billion.

Unlike much of his real estate empire, shares are easy to

divest in the stock market and could come in handy as Trump's

legal fees and fines pile up, including a $454.2 million

judgment in his New York civil fraud case he is appealing.

The bonus also reflects the exuberant trading in TMTG's

shares, which have been on a roller coaster ride since the

company listed on Nasdaq last month through a merger with a

special purpose acquisition company (SPAC) and was snapped up by

Trump supporters and speculators.

Trump will be entitled to the stock bonus under the terms of

the SPAC deal once TMTG's shares stay above $17.50 for 20

trading days following the company's March 26 listing. They

ended trading on Monday at $35.50, and they would have to lose

more than half their value on Tuesday for Trump to miss out.

TMTG's current valuation of approximately $5 billion is

equivalent to about 1,220 times the loss-making company's

revenue in 2023 of $4.1 million.

No other U.S. company of similar market capitalization has

such a high valuation multiple, LSEG data shows. This is despite

TMTG warning investors in regulatory filings that its

operational losses raise "substantial doubt" about its ability

to remain in business.

A TMTG spokesperson declined to comment on the stock award

to Trump. "With more than $200 million in the bank and zero

debt, Trump Media ( DJT ) is fulfilling all its obligations related to

the merger and rapidly moving forward with its business plan,"

the spokesperson said.

While Trump's windfall is rich for a small, loss-making

company like TMTG, the earnout structure that allows it is

common. According to a report from law firm Freshfields

Bruckhaus Deringer, stock earnouts for management were seen in

more than half the SPAC mergers completed in 2022.

However, few executives clinch these earnout bonuses because

many SPAC deals end up performing poorly in the stock market,

said Freshfields securities lawyer Michael Levitt. TMTG's case

is rare because its shares are trading decoupled from its

business prospects.

"Many earnouts in SPACs are never satisfied because many

SPAC prices fall significantly after the merger is completed,"

Levitt said.

To be sure, TMTG made it easier for Trump to meet the

earnout threshold. When TMTG agreed to merge with the SPAC in

October 2021, the deal envisioned that TMTG shares had to trade

above $30 for Trump to get the full earnout bonus. The two sides

amended the deal in August 2023 to lower that threshold to

$17.50, regulatory filings show.

Had that not happened, Trump would not have yet earned the

full bonus because TMTG's shares traded below $30 last week. The

terms of the deal, however, give Trump three years from the

listing to win the full earnout, so he could have still earned

it if the shares traded above the threshold for 20 days in any

30-day period during this time.