No matter where you stand on the political spectrum, the looming trials of former President Donald Trump are historic and unprecedented.
The indictments alone inflamed the passions of supporters and detractors. The courtroom dramas will surely beat any of the most-watched spectacles in media history. It’s also bound to be a boon for media stocks that cover the trials.
Although certain stocks will shoot higher on different elements of the legal drama, they will quickly fall again. For example, Digital World Acquisition (NASDAQ:DWAC) soared on the first indictment announcement. The special purpose acquisition company (SPAC) is the one struggling to complete a merger with Trump Media & Technology Group (TMTG). Digital World is in the process of merging with TMTG, which operates TRUTH Social.
The stock had fallen 60% over the past year as the merger dragged on but jumped 18% on the news. It nearly doubled a few weeks ago when the Securities & Exchange Commission settled fraud charges related to the Trump Media merger. And it just collapsed the other day when it postponed its annual meeting. Investors were not impressed with the request to extend its merger timetable.
The stock is now down 52% from its recent highs, though still 22% above its low point. It’s one sure to continue bouncing around as the trials progress. But the following three companies are media stocks to buy for the long haul.
Fox (FOX/FOX-A)
Fox (NASDAQ:FOX/NASDAQ:FOX-A) was once a very Trump-friendly news organization, but the relationship soured once he left office. Coupled with sidelining its top media personality, Tucker Carlson, Fox lost a large swath of its audience.
The media company used to dominate the primetime news hours by a wide margin. Now Fox routinely loses to the likes of Comcast’s (NASDAQ:CMCSA) MSNBC. And though July ratings showed Fox on top once again, year-over-year comparisons show Fox lost 27% of its primetime viewers and a whopping 35% in the all-important 25- to 54-year-old demographic.
The Trump trials may very well bring viewers back. Fox still has a fairly conservative slant. Taking Carlson off the air caused the viewership of rival conservative outfit Newsmax to jump, though it doesn’t possess the reach of Fox. Newsmax had 256,000 total viewers in July versus the 1.57 million Fox garnered. Viewers, though, will undoubtedly turn to Fox to get a different mainstream perspective on the proceedings. It could end up bringing more than a few back into the fold.
Rumble (RUM)
Video-sharing platform Rumble NASDAQ:RUM) is another conservative media stock likely to benefit from the prosecution of Trump. The YouTube alternative saw increased engagement by viewers in the second quarter despite a decline in monthly active users (MAUs).
Minutes watched per month jumped 46% to 11.8 billion as hours of uploaded video per day increased 48% to 13,229. MAUs were flat year over year at 44 million for the period, though down from 48 million in the first.
Rumble said the decline was primarily due to a drop in political news. In the U.S. and Canada, MAUs dropped from 32 million to 28 million. The Trump trials will change that in an instant.
Rumble bills itself as the free speech alternative to YouTube, which routinely censors creators for offering opinions outside the mainstream or with which it disagrees. As the trials draw in more viewers seeking out non-sanitized opinions, Rumble will find many staying after the trials conclude. The events will undoubtedly draw more creators to the platform as well.
Revenue surged 468% to $25 million in what was a bit of a downer of a quarter. The trial of the century will surely see Rumble’s revenue and profits rocketing skyward.
Warner Bros Discovery (WBD)
Mostly known for its movie studio, HBO streaming service and a variety of educational TV programs, Warner Bros Discovery (NASDAQ:WBD) is also home to CNN, the 24-hour news channel.
CNN’s news programs lived and died with Trump. During his presidency, the daily foibles of its anchors and reporters interacting with Trump were a ratings bonanza. With him out of office, ratings crashed. In the weeks following President Biden winning the White House in 2020, CNN lost half its audience.
In July, Newsmax had half the viewers of CNN during primetime, despite the latter’s decades of existence. It might just exceed CNN before long.
But the Trump trials should give CNN a big boost again, and Warner Bros Discovery could use the opportunity to sell the channel. Speculation that the entertainment company might sell CNN, and management officially denied this, but that might be because it wouldn’t get a decent price. However, a ratings boom could change that, and a sale would ultimately benefit Warner Bros Discovery’s bottom line. You wouldn’t be buying Warner Bros Discovery for CNN but despite it.
On the date of publication, Rich Duprey did not hold (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.
