Recently, rumble stock has attracted much attention among investors. As a new video platform that emphasizes free speech, rumble has seen rapid user growth and has great potential. However, as a new stock, investing in rumble also involves high risks. In terms of business model, rumble competes directly against youtube, which means huge challenges ahead. When considering invest in rumble stock, investors need to assess both upsides and downsides. This article will provide key facts investors should know about rumble stock, assess its risks and potentials, and offer suggestions on how to invest in rumble stock.
Rumble’s business model and competitive advantages
Rumble was founded in 2013 in Toronto, Canada. It is a video-sharing platform similar to YouTube, but positions itself as a ‘free speech’ alternative by having looser content moderation policies. This has attracted many conservative voices who feel censored on YouTube. Rumble has seen rapid growth recently. Its key advantages include: 1) Large market potential as an alternative to YouTube; 2) First-mover advantage as the leading ‘free speech’ video platform; 3) Strong word-of-mouth growth driven by dissatisfaction with Big Tech censorship. However, rumble also faces huge challenges competing with YouTube, which has massive network effects and advanced recommendation algorithms. Overall, rumble’s business model has strengths but needs to prove it can compete with YouTube in the long-run.
Rumble’s financial performance and valuation
Rumble went public via a SPAC merger in December 2021. Its stock trades on the NASDAQ under ticker RUM. Rumble generates revenue primarily from advertisements, subscriptions and transactions. In 2021, Rumble had $16 million in revenue, but was still losing money. Rumble is projected to grow revenue to $56 million in 2022. Rumble’s market cap stands around $2 billion currently. That values Rumble at over 35x estimated 2022 revenue. This is a very high valuation indicating investors have high growth expectations. However, profitability remains a huge question mark. Rumble stock is likely overvalued currently based on financial fundamentals. But it could see further growth if user engagement continues rising rapidly.
The risks of investing in rumble stock
As a new public stock, rumble carries substantial risks for investors. Firstly, it faces intense competition from YouTube and risks losing out if it can’t differentiate itself. Secondly, rumble’s ‘free speech’ positioning could lead to reputation risks and loss of mainstream advertisers. Thirdly, rumble has very high valuations but unproven business model, putting it at risk of crashing if growth stalls. Fourthly, rumble’s CEO Chris Pavlovski holds special voting shares, giving him control. This raises corporate governance concerns. Lastly, stock prices could see volatility as early investors cash out. While rumble’s stock has potential, it also carries high uncertainty.
Rumble stock is a high risk, high reward investment. It has opportunities to disrupt YouTube but unproven business model. Wise investors should wait for more data before investing heavily. Small, speculative positions may be warranted given the upside potential.