First it was Digital World Acquisition (NASDAQ:DWAC), and now it’s CF Acquisition Corp. VI (NASDAQ:CFVI). It seems like every investable business linked to former President Donald Trump is breaking out, and some traders are betting that CFVI stock will rally through the end of the year.
As you may recall, Digital World Acquisition gained exposure when Trump announced that it would serve as the blank-check partner for his new social media venture, Truth Social.
DWAC stock had its moon shot, and it appears that CFVI stock may be in the beginning stages of its own rocket ride. After all, there’s a Trump connection with CF Acquisition Corp. VI, though it takes some digging to get the details.
Today, I’ll do some of the digging on your behalf, so that you can make your own decision as a prospective investor. Just as importantly, I’ll invite you to look beyond the Trump-trade angle and consider the far-reaching constitutional considerations inherent in this business.
A Closer Look at CFVI Stock
Before we start climbing into those deep rabbit holes, let’s take a breather and indulge in a bit of technical analysis.
You know how pre-merger-announcement special purpose acquisition company (SPAC) stocks tend to stay near $10? That’s what happened with CFVI stock for many months, until the beginning of December.
On Dec. 1, blank-check company CF Acquisition Corp. VI disclosed its intention to reverse-merge with Rumble.
The closing of that deal is expected to occur in the second quarter of 2022. However, the trading community didn’t wait that long to start gobbling up shares of CFVI stock.
As it turned out, the buyers pushed the share price up to $15.48 by Dec. 8. A couple of days later, the stock settled near $13.50.
It’s far too early to determine any meaningful support or resistance levels for CFVI stock.
What I will say with confidence, though, is that the overall trend is to the upside and it would be reckless to short-sell this stock now.
The Trump Connection
If you’re willing to accept the risks and the share-price volatility, it’s fine to engage in the Trump-stock trade.
So, now I’ll attempt to connect the dots between Trump and CF Acquisition Corp. VI.
Howard Lutnick is the chairman and CEO of CF Acquisition Corp. VI, and also of financial-services firm Cantor Fitzgerald.
Merger target Rumble is an alternative-media platform, much like Truth Social will be when it’s launched.
Yet, the connection goes deeper than that. As I learned from InvestorPlace contributor Samuel O’Brient, Lutnick said he could confirm that The Trump Media Group and Digital World Acquisition were utilizing Rumble for its distribution services.
Moreover, it’s been reported that Rumble was being paid by Trump’s group on a non-exclusive basis.
Creating the Rails
It’s important to understand the connection between Truth Social and Rumble, but don’t conclude that they’re essentially the same thing.
Trump’s social media platform is still in development. In contrast, Rumble is a fully functioning video-sharing platform that’s already been around for a while.
In a personal note, Rumble CEO Chris Pavlovski explained how his company is fiercely independent of external influences:
“Rumble is creating the rails to a new infrastructure that will not be bullied by cancel culture. We are a movement that does not stifle, censor, or punish creativity and freedom of expression. We believe everyone benefits when they have access to more ideas and diverse opinions.”
I suppose you could say that Truth Social has similar First-Amendment-focused aspirations. But again, Rumble’s already fielding viewer traffic – and apparently, lots of it.
According to the company, Rumble’s average monthly active user count grew from 1.6 million in 2020’s third quarter, to 36 million average monthly active users in the third quarter of 2021.
Not only that, but Rumble’s viewer engagement increased 44 times from the second quarter of 2020 to 2021’s third quarter, to 8 billion minutes watched per month.
The Bottom Line
Now, you have a fuller picture of the Trump connection, as well as Rumble’s free-speech angle and the company’s fast-growing user engagement.
It’s all very fascinating, but bear in mind that CFVI stock is likely to remain volatile. Consequently, investors should keep their position sizes small.
At the end of the day, not everybody will be interested in Rumble. Still, it already appears to have a loyal following which could lead to deep monetization opportunities, irrespective of how the Trump trade plays out.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
