Shares of Rumble (NASDAQ: RUM) surged today as it continued to ride a wave of support following President-elect Trump's victory last Tuesday. It was one of several stocks in the so-called "Trump trade" to gain on Monday as Tesla and cryptocurrencies like Bitcoin also popped. There wasn't any major company-specific news out on Rumble, which is essentially a conservative alternative to YouTube, but there was one item that could have spurred gains in the stock.
Rumble stock closed up 18% on the day.
Image source: Getty Images.
Rumble has a significant backer
Rumble initially soared in after-market trading last Tuesday, but the stock ended up in the red on Wednesday, a sign that investors may have seen it as a buy-the-rumor/sell-the-news type of event.
However, after momentum in the stock built on Friday, Rumble jumped today even as the S&P 500 index was nearly flat as markets continued to shake out following the election.
One news item that may have given the stock a boost today is that Dave McCormick, previously the CEO of the hedge fund Bridgewater Associates, won the Senate race in Pennsylvania. According to reports, McCormick's biggest individual stock holding is Rumble, of which he owns an estimated $4 million.
While that fact shouldn't directly impact Rumble's business, it could attract more investors to the stock since McCormick is both a hedge fund megamillionaire and now a U.S. Senator.
Will Rumble's momentum continue?
Rumble reported last week that its platform broke multiple records on Wednesday night, including the number of live streams, live concurrent views, consumption, Rumble Premium subscribers, and advertising revenue. The company set a record of 1.79 million concurrent viewers on election night as well.
It's unclear if that momentum will continue for Rumble, but Trump's election figures to benefit the company as it's likely to draw more attention to conservative media platforms.
Still, Rumble is small and unprofitable today, so the company has a lot to prove in order for the social media stock to be a winner.
Should you invest $1,000 in Rumble right now?
Before you buy stock in Rumble, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rumble wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $904,692!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of November 11, 2024
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.
