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Why Rumble Stock Is Up Big This Week

Motley Fool - Sat Mar 30, 2:16AM CDT

Rumble(NASDAQ: RUM) stock closed out this shortened week's trading with big gains. The company's share price closed out the stretch up 10.8%, according to data from S&P Global Market Intelligence.

The streaming-video specialist's stock climbed higher in conjunction with the explosive gains recorded by Trump Media & Technology Group(NASDAQ: DJT) after the company completed its merger with a special-purpose acquisition company (SPAC). While Rumble stock subsequently wound up pulling back following the release of its fourth-quarter report, it still closed ended the week with big gains.

Rumble stock gets a bump from Trump Media

Trump Media & Technology Group, a social media platform that former President Trump owns a majority stake in, completed its SPAC merger with Digital World Acquisition and began trading on the Nasdaq stock exchange on Tuesday. The stock rocketed higher out of the gate and went on to climb even higher, ending the week's trading up 67.7%.

In addition to both companies operating platforms that are broadly considered to be more appealing to people with right-leaning political positions, Rumble and Trump Media also have a video-sharing partnership. Thanks to the explosive start for Trump Media stock, Rumble shareholders also enjoyed some strong bullish momentum this week.

But what about Rumble's Q4 numbers?

Rumble posted its fourth-quarter earnings results after the market closed on March 27, delivering earnings performance for the period that beat Wall Street's target but sales that fell short of expectations. The company posted a per-share loss of $0.14 on sales of $20.39 million. Meanwhile, the average analyst estimate had called for the business to record a loss of $0.22 per share on sales of roughly $28.1 million.

Rumble's revenue increased just 2% year over year, and the arrival of a big sales miss despite some favorable engagement tailwinds is concerning.

The company closed out the fourth quarter with 67 million average monthly active users (MAUs), up 16% on a sequential quarterly basis. On the other hand, average estimated minutes watched per month in Q4 declined to 10.5 million, down from 10.7 billion in Q3.

Engagement was also down substantially from the 80 million average MAUs that the platform registered in the prior-year quarter, although the previous period probably saw a significant benefit from the 2022 congressional elections. With the 2024 presidential and congressional season ramping up, it's reasonable to expect that engagement trends will improve. But there are still unanswered questions about the company's monetization strategy, and it remains to be seen if Rumble can hit its target of reaching breakeven earnings in 2025.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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