Pending no further complications, Elon Musk will own Twitter (NYSE:TWTR) by the end of the week. Reuters reports that the Tesla (NASDAQ:TSLA) CEO plans to close the deal by Friday, Oct. 27. According to the outlet’s source, Musk’s investors have already received financing commitment paperwork.
TWTR stock is slowly trending upward today after some recent volatility spurred by Musk’s plans to significantly reduce the company’s workforce. While Twitter employees have penned a letter in protest, it isn’t likely to yield any positive results. However, another stock in the social media space has been rising steadily today as momentum for the deal heats up. Rumble (NASDAQ:RUM) has been gaining steadily since Musk announced plans to renew his Twitter takeover offer. As the deal nears finalization, RUM stock is poised to soar even more.
Musk’s plans to create a more free-speech-centric Twitter won’t be good for all social media stocks. Former President Donald Trump’s Truth Social doesn’t have the means to compete with the much larger platform. Its parent company Digital World Acquisition Corp (NASDAQ:DWAC) is falling today for good reason. But Rumble is uniquely positioned to benefit from Musk’s Twitter takeover. Let’s take a closer look at why.
What This Means for RUM Stock
As of this writing, RUM stock is up 12% for the day and shows no signs of slowing down. Since going public through a special purpose acquisition company (SPAC) merger in September 2022, the stock has lost 22% of its value. However, Musk buying Twitter could be exactly what the company needs to pull back into the green and start growing.
Rumble first gained notoriety in early 2022 as DWAC ushered in the rise of the Trump trades. Another company driven by a highly conservative user base, it often moved in solidarity with the SPAC partner of the Trump Media & Technology Group (TMTG), Truth Social’s parent company. Since the platform launched in February 2022, it has battled significant macroeconomic and legal headwinds, losing 67% of its value since the year began. But while Truth Social contended with regulatory probes and declining downloads, Rumble reported record user growth. It also closed its merger easily and began trading while DWAC has worked hard to delay its merger vote.
Through it all, Rumble has proven that it can stand on its own and doesn’t need Trump to grow as a company. All it needs is an active user base, and it certainly has one. While RUM stock initially fell last week on reports that rapper Ye is purchasing right-wing social media platform Parler, it quickly bounced back. That’s because Rumble’s unique niche positions it well to benefit from the rise in conservative momentum. As a video-sharing platform, it doesn’t compete with Parler for users, and it won’t be competing with Twitter.
However, if more conservative media personalities return to Twitter under Musk, they will also continue using Rumble. This type of momentum will only serve to push RUM stock upward as the company rides the wave created by Musk’s Twitter takeover.
The Bottom Line
Rumble has already demonstrated its ability to hold its own against other conservative media companies. But Musk buying Twitter is going to shift the industry landscape in its favor while pushing competitors like Truth Social out the door. As InvestorPlace reports:
“Rumble will keep attracting new content creators, which will help grow its user base accordingly. These types of media personalities will choose Twitter over Truth Social due to its dynamic reach. But they will also keep using Rumble.”
All signs point toward a positive future for RUM stock that looks much more questionable for its Trump trade peers.
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.
