Rumble has several positive drivers that may enable the company to disrupt the U.S. social media landscape. Rumble has agreed to merge with CF Acquisition Corp (NASDAQ:CFVI), a special purpose acquisition company (SPAC). In light of Rumble’s strong potential and positive catalysts, I believe that CFVI stock is a good name to buy for speculative investors.
Indeed, I believe that its value could potentially soar five or ten times over the next two to three years.
Rumble Has a Big Opportunity and Strong User Growth
As I’ve stated previously in columns about Truth Social, former President Donald Trump’s new social media venture, there is currently a huge opportunity for social media outlets that do not practice widespread censorship.
I believe that many Americans, primarily, but not exclusively on the political right, are very upset with Twitter (NYSE:TWTR), Meta Platforms (NASDAQ:FB), and YouTube over their censorship of important ideas and news.
For example, these platforms prevented the news about Hunter Biden’s laptop from circulating before the 2020 presidential election and censored many folks holding right wing ideology, along with some doctors and scientists, due to policy disagreements. In summary, Twitter, Facebook, and YouTube have taken actions that have upset tens of millions of Americans who believe in freedom of speech.
As a result, Rumble has a huge opportunity to attract some of these tens of millions of consumers. And the company has already started to take advantage of the opportunity. Seeking Alpha columnist Landlord Investor reports that Rumble’s “engagement has grown 44x over five quarters to 8 billion minutes per month.” Meanwhile, its monthly average user total surged to 36 million in the third quarter (Q3) of 2021. The number surged to 39 million monthly average users in January 2022.
According to Rumble’s Investor Presentation, the company’s growth from Q3 of 2020 to Q3 of 2021 was similar to that of TikTok in 2018.
Attracting Stars and the Deal With Trump Social
Among the conservative luminaries who have joined Rumble are Fox News personality Dan Bongino, Donald Trump, Jr., and Matt Gaetz, a pro-Trump congressman from Florida.
Two maverick non-right wing people — journalist Glenn Greenwald and former U.S. Representative Tulsi Gabbard — have reportedly been paid to contribute to Rumble.
Meanwhile, if Truth Social solves its recent technical issues and thrives, Rumble can meaningfully benefit from the success of Trump’s platform. That is because Rumble has agreed to host video for Truth Social. It is highly likely that the more video Truth Social hosts, the more money Rumble will receive from Trump’s platform.
What’s more, as of December, the two companies were looking to collaborate on a streaming offering called TMTG+, which would charge users subscription fees.
A Top Executive and Strong Revenue Potential
Howard Lutnick, the chief executive officer and chairman of both Cantor Fitzgerald and CF Acquisition Corp, is sponsoring CFVI stock. In addition to providing ideas about how to manage Rumble, Lutnick can also be instrumental in convincing institutional investors to take a chance on Rumble by buying shares of CFVI.
Rumble estimates that if its audience becomes 18% as large as that of YouTube and its average revenue per user is 57%, as large as YouTube, its annual revenue would come in at $1.4 billion. I believe that by attracting star contributors, along with many American conservative and maverick consumers, the company can attain those metrics within two or three years.
As of Jan. 18, Landlord Investor estimated that the enterprise value of CFVI stock was $2.2 billion. Since then, the shares have fallen slightly.
Assuming it can trade at 4.5 times $1.4 billion of revenue in 2025, the shares’ market capitalization would be $6.3 billion then, about triple its current valuation.
The Bottom Line on CFVI Stock
Rumble looks well-positioned to continue generating strong growth, while the valuation of CF Acquisition Corp’s shares are quite attractive. Given these points, the shares are a buy for risk-tolerant investors.
On the date of publication, Larry Ramer held a long position in CFVI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.