Is Rumble, A Right-Wing Social Media Firm, Already The Next Meme Inventory?

Dan Bongino is one of many conservative media personalities featured in the SPAC prospectus … [+]Rumble, which hosts content from Bongino, has grown in popularity on the right web.

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Rumble is a fast growing social media company with strong support among conservative Americans. Next year, Rumble will go public with a SPAC deal valued at more than $ 2 billion. This transaction would be similar to one that former President Trump envisioned for his right-wing media group.

Rumble plans to merge with Cantor Fitzgerald’s investment firm to go public. Cantor Fitzgerald is a Wall Street bank that has been around for decades. Rumble has $ 300 million left in cash, according to the statement released on Wednesday evening. They expect to be ready in the second quarter of next year.

Cantor Fitzgerald’s investment vehicle for Cantor Fitzgerald was already publicly traded under the CFVI ticker, and its shares rose nearly 25% to $ 12.

Rumble, which was founded in 2013, describes itself as a “real neutral platform” but has become a popular site among Republicans in the past two years as criticism of existing social media platforms such as Facebook and Twitter has been among conservatives who say they are wrong to restrict speech.

“Rumble is designed as a rail and independent infrastructure that is immune to the demolition culture,” said Chris Pavlovski, CEO and founder of Rumble. “We are a movement that does not stifle, censor or punish creativity and believe that everyone benefits from access to a neutral network with different ideas and opinions.”

Rumble’s popularity skyrocketed after Trump’s defeat in the 2020 presidential election, with monthly users rising from around 2 million to over 20 million late last year. It now has nearly 40,000,000 users. This is driven by conservative media personalities who have made a home on Rumble. An investor prospectus for the SPAC highlights figures like Dan Bongino, Rep. Devin Nunes, Glenn Greenwald and Trump.

Putting the spotlight on the former president’s presence at Rumble is ironic as the ex-president poses as a competitor to Rumble. He plans to develop a social media app called Truth Social, whose business plan is almost identical to Rumble’s: to offer conservatives a new place away from traditional social media. Right wings are also flocking to Gab, Telegram and the re-launched Parler.

Trump also wants to use a SPAC to raise money and exposure for Truth Social. He takes advantage of the trend towards blank check companies. He and Rumble see SPACs as big bait. These allow them to bypass traditional funding channels that openly partisan companies may not have available. This opens a way to public markets. In this way, they can gain the support of users and their supporters and thus turn them into investors.

The publicly traded investment vehicle Trump plans to join has swung its shares from under $ 10 to over $ 100 since Trump’s announcement by the SPAC. Since then, they have fallen below $ 50. These shareholders are not driven by what traditionally motivates interest in a stock: concrete financial figures and future forecasts. In his SPAC prospectus, Trump made a very short pitch. Instead, he broadly outlined his dream of competing with every media company from Disney to Facebook while building a web services arm that would theoretically compete with Amazon’s own such entity. (Why? Amazon has sometimes removed conservative websites from their listings because they had controversial content. Trump could find a niche company that offers the same product but doesn’t care what it publishes.

Rumble offers more that could be attractive to investors. Unlike Trump’s company, which hasn’t even released a beta version of the app, Rumble actually has an eight-year-old company, although its prospectus doesn’t provide any insight into basic indicators of the company’s success, such as sales or profits. Rumble has been showing a rapid surge in user numbers and significant engagement lately. According to Rumble’s prospectus, 8 billion minutes of video were viewed by users in the third quarter. That is 3,900% more than a year ago. And Rumble is also suggesting building a web hosting business similar to Amazon’s.

No, tangible business proposals aren’t really what seems to be driving stock prices for Trump and Rumble. These companies have become meme stocks and stocks that are prone to price volatility and insane investor sentiment.

What is the market value of a Trump branded social network company? Are rumble stocks worth the surge they saw this morning? The underlying financial stocks don’t fully support either. Instead, buying their stocks seems like an investment in a social statement rather than betting on future cash flows and profits. Remember, Trump’s business has no cash or income, and while Rumble presumably could, it has not publicly detailed it.

At the start of the meme stock mania this year, buying a GameStop stock was a comment that you were online, young – and wanted to beat the bird to the existing traditional investors who had beaten the stock. Some people have traded very well in GameStop stock and have been able to join the club. Others lost a lot of money, but they were allowed to participate.

Trump stocks and rumble are one way of expressing a similar view. But this time it’s big tech. These stocks are all about being part of an online community as well as funding the operation of a media company – just as investing in GameStop was only partially about wagering the future of buying video games in person at a mall.