Interest in CF Acquisition Corp VI (NASDAQ:CFVI) stock is rising as the company announces the effectiveness of an S-4 statement and sets a shareholder vote for Sept. 15 to buy Rumble. CF Acquisition is led by Howard Lutnick and sponsored by Cantor Fitzgerald.
Rumble is a rights management system for video that promotes itself as “immune to cancel culture.” It hosts news stories, podcasts and videos on finance, politics and culture.
CFVI stock was trading at $10.09 per share in premarket trading, representing a market capitalization of $383 million.
What’s Going on With CVFI Stock?
SPACs like CFVI have lost favor in 2022. For most of this year, CF Acquisition VI has been trading close to $10 per share. That’s what investors get back if it doesn’t find a merger partner.
The announcement of the S-4 and shareholder vote should lead CFVI to trade closer to the value of Rumble. CBI Insights has estimated Rumble’s value at $500 million.
The transaction will provide Rumble with $400 million: $300 million from a trust account and $100 million from a private investment in public equity (PIPE). Rumble will use the money to recruit creators and build out its technology platform.
Rumble’s fate is seen by some analysts as tied to that of Digital World Acquisition (NASDAQ:DWAC), the SPAC seeking to bring former President Donald Trump’s Truth Social public.
Cantor Fitzgerald has taken four other companies public through SPAC deals, which were detailed by InvestorPlace contributor Will Ashworth in March. All the earlier deals still trade below the $10 per share SPAC price.
What Happens Next for CFVI Stock
Rumble could be different. It has a platform and a niche in the market. Not all the niche is political, giving it hope for a long-term future. RocketReach, which has estimated Rumble’s revenue at $26 million, quotes management as saying they want to solve Digital Rights Management (DRM) problems for all small creators, not just those of large studios.
But the company will have to prove itself to a skeptical market.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.