Rumble stock surged 81% after Tether's $775 million investment, but faces tough competition.

From Nasdaq.: 2024-12-25 21:30:19

Rumble Inc. (NASDAQ: RUM) saw an 81% surge in stock price after Tether announced a $775 million investment. Tether will own a stake in Rumble but won’t nominate directors. Rumble plans a $525 million self-tender offer and $250 million for growth initiatives. The company faces tough competition in the video-sharing space.

Rumble’s revenue surged from $9.5 million to $86 million in the last year, with MAUs peaking at 80 million before dropping to 67 million now. The company is loss-making with high operating costs. The $250 million investment could boost user numbers and revenue, potentially improving its financials and stock performance.

Despite the stock’s 80% jump, RUM is trading at 31x trailing revenues, signaling potential overvaluation. RUM stock has underperformed the market in recent years. Trefis’ High-Quality Portfolio has outperformed the S&P 500 consistently. RUM’s returns in 2024 were strong, but its long-term performance has been lackluster compared to the broader market.

Trefis’ Reinforced Value Portfolio has also shown strong returns, outperforming the S&P 500. Investors should consider the different Trefis portfolios for potential market-beating opportunities. The views expressed are the author’s and not necessarily those of Nasdaq, Inc.



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