Video-sharing platform Rumble Inc. (NASDAQ: RUM) shares surged over 60% in a week, driven by several catalysts. Perhaps more importantly, it's caught the attention of traders and investors.
Rumble is a fairly new social media video platform in the consumer discretionary sector that aims to be a free alternative to existing platforms like Alphabet Inc. (NASDAQ: GOOGL) owned YouTube. Like YouTube, it generates its revenues from advertisers and provides monetization opportunities for content creators. Users can watch, subscribe to, like, share, and comment on videos and live streams. The platform has been gaining momentum with a recently announced partnership with Barstool Sports and David Portnoy.
What differentiates Rumble from YouTube?
There are several features that separate Rumble from other mainstream video-sharing platforms. It claims to have no censorship algorithms, endorses free speech, and rejects cancel culture. However, there has been controversy raising concerns over hate speech and content. It's considered to be an alternative for conservative and right-wing ideologists with a number of popular right-wing and alt-right hosts and commentators like Tucker Carlson, Dan Bongino, Grant Cardone, Ben Shapiro, Dave Rubin, and Russell Brand.
It is affiliated with TKO Group Holdings Inc. (NYSE: TKO), owned by UFC, Power Slap, Street League Skateboarding, NITROCROSS, NEWSMAX, WPT, New York Post, Dr. Drew, and a growing number of alternative content providers. Rumble has stated that its largest digital audience is those with no political affiliation, Democrats second and Republicans third.
Trump-driven price action
It's become a popular site for Donald Trump supporters, and its stock tends to spike during Trump victories, similar to Digital World Acquisition Co. (NASDAQ: DWAC). With the 2024 elections, the platform should gain traction in terms of users, views, and potential stock price action.
Rumble Studio launches with live advertising bidding.
On January 23, 2024, Rumble announced the launch of its live-streaming tool, Rumble Studio. Rumble Studio features call queues, co-host moderation, and real-time performance monitoring stats and clips. It enables Rumble content creators to live stream video to multiple platforms and invites guests to engage with viewers. It integrates with YouTube, Amazon.com Inc. (NASDAQ: AMZN), owned Twitch, X, Locals, Kick and Meta Platforms Inc. (NASDAQ: META), and Facebook.
Rumble Studios enables "live advertiser bidding, where creators fully endorse and tell their audiences to buy your product, all automated and in real-time." According to Rumble CEO Chris Pavlovski. Live advertiser bidding enables advertisers to offer immediate bids for reading ads on the air. Rumble has a patent pending on this feature.
Growth is growing.
Rumble reported a Q3 2023 EPS loss of 14 cents per share, missing analyst estimates by 2 cents. Revenues rose 64% YoY to $18 million, missing analyst estimates of $25.4 million. Global monthly active users (MAUs) rose to 58 million, of which 40 million were in the United States and Canada. Average estimates of minutes watched per month rose 19% YoY to 10.7 billion. Rumble lost $29 million in the quarter. The company closed the quarter with $267 million in cash and cash equivalents. On January 8, 2024, WIRED magazine posted that the SEC confirmed Rumble is part of an active and ongoing investigation.
Guaranteed minimum earnings
To compete with larger established social media and video-sharing platforms, Rumble has temporarily provided minimum earnings for some of its most popular content creators. This resulted in an additional $26.1 million in programming and content costs in Q3 2023. Rumble CEO Chis Pavlovski commented, "…by the end of 2024, we anticipate increased ad-driven monetization will allow us to attract new and retain existing creators, with reduced reliance on guaranteed payments. With the aforementioned in place, we expect our guaranteed creator commitments to significantly decrease by the end of 2024 while our revenue engines come online, moving us materially towards break-even in 2025."
Rumble analyst ratings and price targets are at MarketBeat. Rumble peers and competitor stocks can be found with the MarketBeat stock screener. RUM has a 15% short interest.
Daily bull flag pattern
The daily candlestick chart for RUM illustrates a daily bull flag pattern. The daily flagpole formed on the three-day spike from $3.19 up to $7.02 on January 23, 2024. Shares have pulled back, forming the flag comprised of lower highs and lower lows. The daily relative strength index (RSI) also slipped back under the 70-band but is starting to bounce again off the 60-band. Pullback support levels are at $5.36, $4.60, $3.80 and $2.86.
