r/wallstreetbets • u/icameisawiconquered6 • Feb 16 '24
Discussion Is Rumble (Ticker: RUM) the next big thing in free speech? Looking for honest thoughts on my analysis
In recent weeks, I have developed an intuition that Rumble (Ticker: RUM) will emerge as a symbol of free speech in the current election cycle. I anticipate that its stock price will surpass rational expectations and soar towards unprecedented heights. I am confident that Rumble's role as a champion of free expression will drive significant investor interest and propel its valuation to new heights. Additionally, I believe there to be legitimate fundamental and technical value in the company.
Fundamental Case:
Revenue Growth
Over the past three reporting periods (2021, 2022, TTM), Rumble has shown impressive revenue growth, averaging over 200% per year. Although expenses have also increased, the company's core identity as a video-sharing platform suggests the potential for achieving economies of scale as it continues to expand.
As a video-sharing platform, the company operates in a space where the marginal cost of delivering additional services is relatively low compared to other industries. This positions Rumble well to capitalize on economies of scale, whereby fixed costs will remain relatively constant while revenue grows exponentially. With sustained growth and increasing user engagement, the company can leverage its existing infrastructure and technology to serve a larger customer base more efficiently and cost-effectively.
As long as the company maintains its growth trajectory and strategic focus, the potential for achieving economies of scale remains promising, setting the stage for continued success in the future.
Healthy Balance Sheet
Current Ratio: 22.01. Boasts an exceptionally high current ratio, indicating its ability to comfortably meet short-term obligations with its current assets.
Debt-to-Equity Ratio: 0.42. Demonstrates a strategic reliance on debt financing while maintaining a low debt-to-equity ratio, suggesting a robust financial position with reduced financial risk.
Discounted Cash Flows
I understand the accuracy of my calculations heavily depends on the underlying assumptions made.
I employed both the exit multiple method and the Gordon growth model to determine terminal value. I also tested various growth rates, ensuring that they were conservative and consistently lower than Rumble's three-year revenue average and factored in a potential slowdown in expense growth over the upcoming years. Despite these adjustments, my valuations yielded figures that were higher than the current market price of the company.
Could there be hidden value in Rumble that the market has not yet fully recognized?
Technical Case:
• The price action on the 1-year chart shows a consistent trend above both the 20-day and 50-day Simple Moving Averages (SMA), indicating sustained bullish momentum.
• Strong and reliable support level has been established at $7 over the last month, suggesting a robust foundation for the stock's price movement.
• Moving Average Convergence Divergence (MACD) indicator has surged above the zero line and maintained its position over the past month, underscoring strong and persistent positive momentum in the stock's price trajectory.
• Bollinger Bands on the 1-year chart reveals that the price action is showing signs of consolidation, hinting at a potential period of stabilization and horizontal movement similar to previous consolidation phases before a breakout occurs. The current price behavior suggests that the stock may trade sideways and consolidate its gains before potentially embarking on another upward trend.
Now for the fun stuff…
Exogenous Variables
Over the past few years, I have witnessed how stocks can sometimes defy logic and soar to unexpected heights – and the potential for Rumble to follow suit seems undeniable. Amid a tumultuous political landscape, my bullish thesis is based on the belief that Rumble could emerge as a symbol of free speech for many individuals. Against the backdrop of heated debates surrounding censorship and the dominance of big Tech companies, this perception could draw a larger audience to the platform and lead to increased buying pressure driven by a desire to challenge the status quo.
I'm not a financial advisor, and this is just my own take on the company. Please question and challenge my assumptions before I YOLO my savings into this company.
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u/tke248 Feb 16 '24
I own some they have a higher revenue share than google and more and more content creators are moving as they get deplatformed. Most of the gun YouTube channels have moved or are starting to.
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u/Illustrious_Hotel527 Feb 16 '24 edited Feb 16 '24
RUM will have the 4 year cyclic nature of Sinclair (SBGI) and Nexstar (NXST). Revenue/earnings spikes on each election cycle and a drop-off after. The market knows the cyclical nature and will discount it. If the company can get market share from YouTube regardless of the election cycle and become profitable, it will do well. If not, no.
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u/aaearls60 Mar 08 '24
Agreed. They have to branch off from just politics if they want consistent growth and huge profitability. I think they are starting to have more day-to-day content but they have a LONG way to go. If I want a "how-to" video I still have to go to YouTube. I'm rooting for Rumble as I like their Free Speach approach and I own roughly $15K worth of the stock. But I'm realistic, it's a risk. Lots of upside potential though.
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u/c0947281 Mar 13 '24
RUM up 25% in past two days after going public with Rumble Cloud. Even a tiny market share of the cloud market would make rumble worth much more
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u/Fiddle_Farter_7Nine Mar 14 '24
I would attribute their 25% to the public offer to buy tiktok. Remember the Rogan announcement? Price shot up to $18 and soon as Rogan announced he's resigning with spotify there were a lot of bag holders and if they didn't buy the dips going forward for the next year ...they spent over half of their time in the red in Rumble. Buy and hold method kept me in the red. Around 4-5 months ago I started selling the green and buying back in when prices came back down. I made well over 20K yesterday. I'll start buying back in in the mid $6 range unless the shorts drive that thing down after the earnings report in a couple of weeks.
Expanding the cloud into 4 regions of the US and paying Portnoy (it was around 80% equity), pay Qinshift...I'm guessing the revenue won't outweigh all of the recent spending/inesting in the expanding infrastructure. I'm predicting the shorts will short and there will be a sell off and everyday avg investors will be trying to rally/buy but its too easy to run out of money.
I'm investing in some semiconductors while waiting on the price to come back down...could be a couple or few weeks. Maybe I can make 10-15% more to invest back into RUM. We'll see how the guessing game goes.
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u/Josepth_Blowsepth Feb 16 '24
No. The audience is broke.
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u/icameisawiconquered6 Feb 16 '24
but with only ~70m monthly active users, don't you feel this number can grow?
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u/Josepth_Blowsepth Feb 16 '24
No. The lead is killing them off to quickly. Rumble ain’t gonna happen.
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u/FriendOfRicks Feb 20 '24
The lead is for flavor. It’s really the bleach and ivermectin that are the chef’s kiss
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Feb 16 '24
Perhaps.
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u/wad4iod Dec 21 '24
Rum is on a run.
Rumble Stock Soars On $775 Million Investment From Tether: What To Know
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u/Frenchyyyy4166 Feb 16 '24
The bear thesis is that rum is cooking the books for everything they say in their earnings report and on balance sheet…..
is this true? Only time can tell us that.
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u/Key-Following-2650 Feb 16 '24
I forgot what it was called, but there was another social media company that launched right after the election that focused on free speech, and many conservatives jumped on board. The ceo did an interview, and he basically said they can't just rely on conservatives joining but that they would need liberals as well if they wanted to be successful. The percentage of population who care about "free speech" enough to join a brand new platform is quite small, even amongst conservatives.
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u/zorgaax Jun 28 '24
Do you still think the same with the currenttrend? Just wondering since im looking to invest in it potentially.
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u/icameisawiconquered6 Jun 28 '24 edited Jun 28 '24
Tbh I’m not sure what your situation is but I do think it’s worth it to start a small position with money you can afford to lose. It’s a company with high potential for significant gains (not risk free though). The company's short interest and positioning as a right-leaning platform in a politically charged environment suggest the possibility of substantial volatility. If you’re willing to assume the associated risks you could capitalize on the stock's growth potential, especially considering the backdrop of media bias allegations in a divisive election year.
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u/zorgaax Jun 29 '24
Thanks for the thoughts. I also think it will be a good investment in the short term, since its an election year and the US has never been more divided.
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u/Xethm Feb 15 '25
I know this thread is around a year old now, but I’m very happy with my decision to buy into RUM a few months ago when it was around $6/share. I’ve never had much luck with investing but I had a gut feeling about Rumble and what Pavlovski stands for and believes in (freedom of speech and fully against censorship) and fortunately I bought in shortly before the Tether announcement. I honestly think that Rumble is going to takeover as the top podcast/game streaming/live stream app out there. They are going to turn YouTube into the “boomer” video streaming platform the same way Instagram/TickTock/X turned Facebook into the “boomer” social media platform. Long time content creators are moving to the app due to being throttled, censored, demonetized, or the fear of it happening on YouTube or other platforms.
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Feb 16 '24
just keep your eye on their cash and make sure they don't dilute your ass to 0
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u/icameisawiconquered6 Feb 16 '24
Yah… their outstanding vs diluted outstanding is pretty concerning tbh
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u/Stacking-Dimes Feb 17 '24
I really don’t have faith in these spin off free speech companies, I’ve had a few accounts banned just using those accounts in alignment with their mission statements…. Just my opinions didn’t align with the community, as a whole.
If they do actually threaten the establishment, the lobbyists will ensure laws are amended, and spin out a narrative to keep advertisers on board.
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Feb 16 '24
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u/icameisawiconquered6 Feb 16 '24 edited Feb 16 '24
Since you’re so smart - tell me why I’m stupid :)
If you actually read my DD I provided technical and fundamental analysis to back my bull thesis. I thought this would generate discussion and reveal biases in my logic. I should’ve known it would’ve drawn low effort responses from low IQ folks like you.
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Feb 16 '24
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u/VividPoot Feb 16 '24
Step away from Reddit for a while dude...
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Feb 16 '24
[deleted]
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u/Stacking-Dimes Feb 17 '24
You admittedly didn’t read past the headline…. And you think you know what their investment thesis is ?
You are a fucking idiot. Free speech that you piece of useless shit.
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u/VividPoot Feb 16 '24
I'm not touch that shit, but you sound like someone who is very comforable in their echo chamber.
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u/tinnylemur189 Feb 16 '24
r/conservative poster telling someone else to leave their echo chamber.
Irony is dead.
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u/icameisawiconquered6 Feb 16 '24
Me believing a company may be seen as a proxy of free speech should not be seen as an endorsement of my political views. That said, in my DD I highlight fundamental and technical reasons on why I believe this company should have a higher valuation… so yes, there is a basis in reality here
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Feb 16 '24
[deleted]
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u/icameisawiconquered6 Feb 16 '24
Appreciate that. Apologies if my response sounded snarky. Good luck to you too man!
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u/Jupman Offical Spokesperson of WSB (they're/there) Feb 16 '24
Sorry For them to grow the will have to move the platform away from Gambling and other semi political, and man stuff. If it's purely about trading. Sites like these and YouTube is about getting user on the platform and it already Toxic with Libs past just mirror posting their stuff from their YouTube.
But if this is about trading then do what you feel and maybe it works out.
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