Rumble, a fast-growing social media company with many followers among U.S. conservatives, aims to go public next year as part of a PSPC deal that could value the company at more than $ 2 billion, a a transaction similar to the one former President Trump envisioned for his own right-wing media company.
To go public, Rumble intends to merge with an investment firm initially set up by Cantor Fitzgerald, a decades-old Wall Street bank. The deal would leave Rumble $ 300 million in cash, the company said in a statement announcing the transaction Wednesday night. He hopes to complete the process by the second quarter of next year.
Investment vehicle Cantor Fitzgerald, which is already publicly traded under the ticker CFVI, saw its shares rise on Thursday, rising nearly 25% to $ 12.
Rumble, which was founded in 2013, bills itself as a “true neutral platform,” but has become a popular site among Republicans over the past two years as critics of existing social media platforms like Facebook and Twitter have mushroomed among conservatives, who say they are unfair. limit speech.
“Rumble is designed to be the rails and independent infrastructure that are immune to the cancellation of culture,” said CEO and founder of Rumble, Chris Pavlovski. “We are a movement that does not stifle, censor or punish creativity and believe that everyone benefits from access to a neutral network with diverse ideas and opinions. “
Rumble exploded in popularity following Trump’s defeat in the 2020 presidential election, with monthly users rising from around 2 million to over 20 million at the end of last year. The site now attracts nearly 40 million users. Conservative media figures have made their mark on Rumble. An investor prospectus for PSPC highlights figures such as Dan Bongino, Rep. Devin Nunes, Glenn Greenwald and Trump.
Shedding light on the former president’s presence on Rumble is ironic, since the ex-president has lined up as Rumble’s competitor. He plans to create a social media app called Truth Social with an almost identical business plan to Rumble’s: to give Tories a new place away from traditional social media. (Along with Trump and Rumble, right-wing users have also flocked to Gab, Telegram, and a revived Talking.)
Trump also wants to use a SPAC to generate money and attention for Truth Social, taking advantage of the fashion around these blank check companies. PSPCs are an obvious lure for him and Rumble. They allow both to bypass traditional funding avenues that might be inaccessible to these overtly partisan companies, thus opening an easier route to public procurement. There they can rally support directly from their fans and users, turning them into investors.
Since Trump announced PSPC at the end of October, the publicly traded investment vehicle considering partnering with him has already seen its shares rocket crazy from less than $ 10 to as much as $ 100. (They’ve since fallen back to just under $ 50.) These shareholders aren’t driven by what has traditionally driven interest in a stock: hard financial numbers and future projections. Trump offered a limited argument in his PSPC flyer. Instead, he outlined a dream of competing with every media company, from Disney to Facebook, while also creating a web services branch that, in theory, would rival Amazon’s own unit. (Why? Conservative sites have sometimes been launched from Amazon and others to host controversial content. Trump might find a lucrative, albeit niche, business selling the same thing regardless of what the sites post. )
Rumble has more advantages, more to attract investors in a plausible way. Unlike Trump’s company, which has yet to launch a beta app, Rumble actually has a business that has been in existence for eight years, though its prospectus offers no insight into the basic markers of a successful one. business like income or profits. But Rumble can point to a rapid and recent increase in user numbers and significant signs of engagement. According to Rumble’s prospectus, users watched 8 billion minutes of video in the third quarter, an increase of 3,900% from a year ago. And Rumble also offers to set up a web hosting business similar to Amazon’s.
No, tangible business propositions aren’t really what seem to be propelling stock prices for Trump and Rumble. These companies become, in effect, memes stocks, stocks with gyrating prices and manic investor sentiment.
Is a Trump-branded social media company really worth the $ 2 billion it is currently making in market value? Are Rumble’s actions worth the increase they saw this morning? The underlying financial data doesn’t fully support either. On the contrary, buying their shares seems more of an investment in a social statement than a bet on future cash flow or profits. Remember, Trump’s business has no money or income, and while Rumble presumably can, he hasn’t detailed it publicly.
At the start of the stock mania even this year, buying GameStop stock was a comment that you were online, young, and wanted to flip the bird back to the existing mainstream investors who had beaten the stock. A few people did trade GameStop shares and joined this club. Many others lost a lot of money, but yes, they were able to join as well.
Buying Rumble or Trump shares embodies a similar point of view, except this time the middle finger is directed at Big Tech. These actions are as much about belonging to an online community as it is about funding the operations of a media company, just as investing in GameStop was only partially a gamble on the future of in-person video game buying in a mall store.