Shares of Rumble (NASDAQ: RUM) were surging today even though there was no company-specific news out on the video-sharing platform outside of an improvement to a YouTube sync tool. Instead, former President Donald Trump's resounding victory in the Iowa caucuses last night seemed to propel the stock higher as Rumble is often regarded as a conservative version of YouTube. In fact, Rumble was one of a number of Trump-associated stocks that soared on the news today.
As of 1:44 p.m. ET, shares of the video platform were up 14.2%, while Digital World Acquisition, the special purpose acquisition company (SPAC) in the process of buying Trump's Truth Social social network, was up 14.3%, and Phunware, a micro cap that helped build Trump's 2020 reelection campaign app, soared more than 300%.
Image source: Getty Images.
Why Trump's success helped Rumble
It's unclear if there is a direct benefit from Trump's victory or broader success in the election on Rumble, but the thinking among investors seems to be that Trump's win last night will help spark more interest in its content. It's also evident of continued support for the former president whose politics jibe with the platform.
For instance, Rumble bills itself as free of cancel culture and the kind of speech and decency guidelines that tend to govern more mainstream video-sharing sites like YouTube. In many ways, it's the video-sharing equivalent to Truth Social.
Can Rumble keep moving higher?
Rumble stock has fallen sharply over the past year. In fact, it was at all-time lows before today's surge. The company is unprofitable and its revenue has been erratic. It reported $18 million in revenue in the third quarter, which was up 64% from the quarter a year ago, but down 28% from the second quarter, though that may be for seasonal reasons as consumption declines in the summer.
Other metrics show that interest in the platform is building as well. However, the company's loss widened significantly, showing the business model is still unproven. In the coming months, the stock's association with Trump is likely to give it upside if the ex-president performs well during his campaign.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
