Rumble (NASDAQ:RUM) stock is undergoing an important transition as the company is now directly traded on the Nasdaq exchange. Rumble’s reverse merger with former shell company CF Acquisition Corp. VI means that investors can own a stake in the content streaming platform. Moreover, Rumble is getting a sizable capital infusion from this transaction, so its platform can grow quickly with in-demand content.
Achieving this milestone was a lengthy process. One of the hurdles to clear was getting CF Acquisition VI’s shareholders to approve the business combination with Rumble. This finally happened on Sept. 15.
Now, CFVI stock is gone — no big deal, as CF Acquisition was merely a blank-check company. So now, investors have to consider whether they’re really ready to wager on Rumble, a somewhat controversial but promising platform.
What’s Happening With RUM Stock?
Don’t even bother looking for CFVI stock anymore, because it’s all about RUM stock now. The shares surged from $13 to $16 on that first day, Sept. 19, but recently fell back to $13.
There’s a lesson to be learned or reviewed here: Don’t buy stocks on hype. Instead, consider getting in when most traders aren’t paying much attention to a stock.
Of course, you won’t want to buy RUM stock just because the price came down. You’ll need to really think about the company, Rumble, and its focus on the First Amendment and conservative-leaning values.
Even the chosen ticker symbol is an expression of constitutional values. As Rumble’s press release explains, “Without rum, the colonists may never have fought to win the freedom that Americans enjoy today — the very freedom that Rumble exists to protect.”
Rumble Gets a Sizable Injection of Cash
As a result of the reverse merger transaction, Rumble stands to receive roughly $400 million in gross proceeds. Around $300 million of that is to be held in a trust account.
Rumble will have to pay transaction expenses, but what will the platform do with the net proceeds? Importantly, the funds “will be used to attract new content creators to the Rumble and Locals platforms.” This is exactly what the investors should want to hear. Content consumers want to see familiar faces. Could Rumble woo popular podcaster Joe Rogan to its platform in the near future?
What else will Rumble do with those hundreds of millions of dollars? Evidently, it will “continue to build out Rumble’s independent infrastructure, expand Rumble’s teams, begin robust marketing of the platform and services, finance future acquisitions, and for other general corporate purposes.”
That’s a mouthful, but at least we’re getting a general sketch of Rumble’s planned build-out. The “robust marketing” is to be expected, but the “future acquisitions” part actually surprised me. What does Rumble have in mind here? I guess we’ll have to wait and see!
What You Can Do Now
RUM stock will be volatile; that first trading day was a case in point. The share price will sway to and fro, but this doesn’t mean you should get shaken out of the trade.
Instead of panic-selling, consider holding on to your Rumble shares for the long term. If you’re on board with this fast-growing, free-speech-obsessed platform, then hang on and let’s see what Rumble does next.
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.