Elon Musk seems poised to buy Twitter (NYSE:TWTR) again. Months after the Tesla (NASDAQ:TSLA) CEO announced he would be terminating his acquisition agreement with the social media giant, he has returned to his original offer of $54 per share. As the social media sector prepares for its largest disruption to date, investors should be considering the best stocks to buy to stay ahead of the coming turbulence.
TWTR stock’s performance following Musk’s announcement certainly indicates financial markets are taking his offer seriously. Although he is currently dealing with a debt-financing obstacle, it seems likely the deal will close.
During Musk’s first round of Twitter negotiations, TSLA stock fell as investors expressed concern. Just as experts predicted, it plunged again this week after Musk announced his plans. While the electric vehicle (EV) leader will bounce back, other companies may not be so lucky.
If Musk carries out his vision of making Twitter “the platform for free speech around the world,” it will likely be the final nail in the coffin of Digital World Acquisition Corp (NASDAQ:DWAC). The blank-check partner of the Trump Media & Technology Group (TMTG) will see shares fall even more if Musk’s new Twitter lures back Truth Social users. However, other Trump trades stand to benefit if the Musk Twitter takeover commences.
Let’s take a closer look at the top stocks to buy to profit when it does.
|BRCC||Black Rifle Coffee Company||$6.60|
|GROM||Grom Social Enterprises||$0.35|
Black Rifle Coffee Company (BRCC)
One of Musk’s chief accusations against Twitter is that its algorithm is biased against conservative users. While experts have disputed this claim, it is clear Musk wants to build a Twitter that is friendly toward conservative posts. This would bode well for companies that openly espouse conservative viewpoints, and that group is led by Black Rifle Coffee (NYSE:BRCC).
Founded by veterans with seeking to emphasize pro-America and pro-military themes, the company is working hard to become the right wing’s answer to Starbucks (NASDAQ:SBUX). While BRCC has no direct ties to Donald Trump, its founder has stated that he has voted for the former president.
The company has an active Twitter account, but does not post as often as some brands. However, if Musk were to change the platform’s algorithm, it could help promote the type of content that would support Black Rifle’s brand. Its website even features gear with the slogan “Caffeinate Mars,” which seems like a direct tribute to Musk.
If any company is likely to start using Twitter more once he takes over, it is Black Rifle Coffee. With the company’s extensive following, this would likely be an excellent sales driver, sending BRCC stock up.
If Black Rifle Coffee is Starbucks for the American right-wing, Rumble (NASDAQ:RUM) is Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Youtube for the same group. The video-sharing platform rose to market prominence along with DWAC, but unlike the latter, it has actual staying power. More than that, it has the potential to grow as Musk takes over Twitter.
Rumble is home to many conservative pundits and former Republican operatives who left Youtube due to its alleged censorship policies. The platform reported record user growth this year and looks poised to keep expanding as media focus shifts toward the 2024 presidential election. Although popular podcast host Joe Rogan didn’t accept Rumble’s offer to join its platform, he recently praised the company and touted its growth potential.
Since DWAC operates in the same space as Twitter, it won’t be able to compete with the industry giant once Musk takes over. But Rumble is in the video sharing space and can offer conservative commentators something they won’t find on Twitter. Musk’s potential takeover could help boost the popularity of Rumble’s content creators, thereby driving new users to the platform and pushing up RUM stock in the process.
This little-known name emerged as a Trump trade overnight in January after a tweet from a Trump insider. Brad Parscale, who served as a media advisor to the former president, tweeted that AiAdvertising (OTCMKTS:AIAD) had “finally automated the full stack of technologies used in the 2016 election that changed the world.”
AiAdvertising used to operate under the name CloudCommerce before changing its name in February 2021. In July, Mother Jones revealed Parscale to be the company’s largest shareholder.
Although Parscale’s ties to AiAdvertising are not made explicitly clear, he still tweets about it and shares positive updates. While the company recently announced that it had “signed a multi-million dollar agreement with a fintech unicorn,” it did not name the firm.
However, after the 2022 midterm elections, focus will shift toward the next presidential race. This could create an opportunity for more campaigns to utilize the software Parscale has touted. If Musk does change Twitter’s algorithm to become less moderated, posts from conservative campaigns will likely be abundant. This type of momentum could help boost AIAD stock in the years ahead.
Grom Social Enterprises (GROM)
Musk’s proposals for rolling back Twitter’s censorship policies have delighted some users. But there’s one group that may not approve: parents of young children.
If the content posted to Twitter is subject to less scrutiny, parents may want to pull their children off Twitter. With the current problems facing popular content creation app TikTok, parents will need a new platform for their social media-craving children to use. This is where Grom Social Enterprises (NASDAQ:GROM) comes into play.
Grom is an alternative social media venue created especially for children. It bills itself as providing “safe social networking for kids” but it also produces original content for both entertainment and education purposes.
GROM stock recently rose on news that the company had signed two new screenwriters, indicating that is expanding. While the microcap penny stock has had a difficult year, Musk’s Twitter takeover could provide the influx of new users it needs to demonstrate strong growth prospects. Grom’s niche could be its saving grace as the social media landscape prepares for a radical shift.
The leader in audio streaming may benefit from the Musk Twitter takeover in the same way as Rumble. Spotify (NYSE:SPOT) came under fire early in 2022 after a group of medical professionals accused Rogan of spreading vaccine disinformation on its platform.
The company stood by their popular podcast host, though, and it has paid off. In July 2022, Spotify reported strong user growth while beating Q2 revenue estimates. This marked the company’s second consecutive successful quarter.
Now, Spotify is well-positioned to benefit if Musk takes over Twitter. Its CEO publicly defended Rogan, taking exactly the kind of stance that supports Musk’s ideology. Additionally, Rogan is an important Twitter influencer whose following will only grow if Musk makes his proposed changes to the platform. If that happens, it will benefit Spotify as Rogan drives more users to the streaming venue. The same could be said for many other conservative commentators who have popular Spotify podcasts.
Musk taking over Twitter won’t help all social media platforms, but it could easily boost Pinterest (NYSE:PINS). The “visual discovery engine” is enjoying a better year than some of its peers. While Meta Platforms (NASDAQ:META) and Snap (NYSE:SNAP) have struggled over the past six months, PINS is up more than 6%. This makes it an excellent bet among social media stocks to buy.
Unlike its social networking peers, Pinterest has nothing to lose from Musk’s plans for Twitter, as its users won’t be pulled away. However, if Musk’s takeover does lead to a renewed national focus on social media, it has the potential to soar on the momentum.
PINS stock recently shot up on an upgrade from Goldman Sachs. As InvestorPlace contributor David Moadel reports, “Goldman is optimistic about long-term trends such as social commerce and the ‘creator economy.’” In that, we see exactly how Pinterest can ride the same wave as Rumble and Spotify.
The creator economy is growing quickly and among some of its biggest winners have been media personalities. If Musk’s Twitter takeover can boost other creator-centric platforms, it can help Pinterest rise as well.
If AiAdvertising has the potential to grow from Musk taking over Twitter, then Phunware (NASDAQ:PHUN) definitely does. This Trump trade used to move in solidarity with DWAC and Rumble’s SPAC partner CFVI.
Market trends have shifted since then, and DWAC is no longer the dominant mover in the space. But Phunware, an enterprise-cloud platform that helped power previous Trump campaigns, stands to benefit from the same type of momentum as AIAD.
Unlike its smaller cap competitor, Phunware is an established company that has already helped power political campaigns. Earlier this year, it announced a partnership with Campaign Nucleus, a company founded by Parscale.
Phunware may be chosen again by Trump or a similar politician looking to mount a campaign. But before then, it is likely to rise on the positive momentum generated by Musk’s takeover that will favor conservative-leaning companies. PHUN stock’s performance this year has been volatile, but that doesn’t mean it can’t rebound in the right type of market.
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On the date of publication, Samuel O’Brient 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.