After building up its core product portfolio, the video-sharing platform Rumble Inc. (NASDAQ: RUM) has been gearing up to accelerate its monetization. Rumble prides itself on offering a censorship-free social media video platform. This has attracted a right-wing conservative crowd charged up for a very political 2024 with the upcoming presidential elections. Shares of the computer and technology sector disruptor have been elevated due to its association with Donald Trump supporters, as it tends to correlate its stock movements with Trump Media & Technology Group Co. (NASDAQ: DJT).
The company competes with video-sharing platform Alphabet Inc. (NASDAQ: GOOGL), owned by YouTube, and social media sites like Snap Inc. (NYSE: SNAP) and Meta Platforms Inc. (NASDAQ: META).
Foundation Products
Rumble calls itself a mini Google with its synergistic, foundational core products: Rumble Video, Rumble Advertising Center, Rumble Studio and Rumble Cloud. The main product is video streaming by content creators who can also live stream content simultaneously to multiple social media sites. Rumble also offers Rumble Cloud services. It provides content providers with tools through its Rumble Studios tool, which also enables live advertising bidding.
Most of its revenues are derived from advertising. The company has stated that monetization will accelerate in Q2 2024 as its revenue streams will kick into high gear and creator content commitments will decrease significantly. These are side deals made with popular content creators to come onto the platform to share content. Barstool Sports has also come on board with Rumble.
Google Lawsuit #2
Rumble has sued competitor Google for the second time, alleging anticompetitive practices across the ad tech stack. Rumble is seeking injunctive relief and damages exceeding $1 billion. Rumble alleges that Google has monopolized the ad tech stack, representing buyers and sellers concurrently while operating the exchanges. The arrangement creates major conflicts of interest as Google gains inside information that enables it to rig the system in its favor, extracting fees on each transaction.
Rumble also alleges Google is colluding with Meta Platforms to prevent Facebook from providing competitive options to Google's ad tech stack. This lawsuit follows an earlier lawsuit stating the unfairness of Google and YouTube being pre-installed on Android devices. The trial date is expected in May 2025.
Rumble CEO Chris Pavlovski stated, “In addition to the billions in potential damages from both lawsuits, we're also seeking injunctive relief. If we are successful in these lawsuits, Rumble and other platforms can finally have a level playing field in search traffic, mobile apps, and online advertising, which we expect would lead to a material increase to our MAUs in advertising revenue.”
Daily Ascending Triangle
RUM formed a daily ascending triangle pattern. The ascending trendline formed at $3.43 on Jan. 9, 2024. Shares continued to climb on higher lows up towards the double-top flat-top upper trendline resistance at $9.20. Despite lackluster earnings performance with RUM, shares continue to find higher supporting lows due to the election year. The daily relative strength index (RSI) is rising through the 60-band. Pullback support levels are at $6.56, $5.28, $3.97 and $4.33.
Lackluster Earnings, Early Innings
RUM reported a Q1 2024 EPS loss of 14 cents, beating consensus estimates for a loss of 22 cents by 8 cents. Revenues rose 2.2% YoY to $20.39 million, falling short of the $28.13 million consensus estimates. The company has stated that all core products are now online with 2 major launches, including Rumble Cloud and Rumble Studio.
CEO Insights
CEO Pavlovski noted that Rumble secured 2 key strategic partnerships with ACP CreativIT and Qinshift to augment and deliver its suite of products to enterprises. The company has already seen great receptivity to its value proposition. Rumble had 50 million monthly average users (MAUs) on the platform, marking the ninth consecutive quarter of more than 40 million MAUs.
Rumble Studio Adoption
Over 2,000 creators, including Megyn Kelly, Tucker Carlson, Dave Rubin and Donald Trump Jr., have started adopting its Rumble Studio content creator tool. Rumble Studio enables creators to simplify their live streaming by streaming video simultaneously to multiple platforms, inviting guests, and engaging with audiences. Additionally, it allows content creators to monetize their live content to facilitate host-read advertising on the platform. Rumble plans to automate and scale this patent-pending technology feature.
Rumble analyst ratings and price targets are on MarketBeat.
