Today, Rumble (NASDAQ: RUM), a streaming video platform, saw its stock soar by approximately 14% by midday, spurred by two major developments. The company not only debuted a much-anticipated product but also announced its intention to potentially acquire the popular social media app, TikTok, from its parent company, ByteDance.
Rumble has carved out a niche for itself as a platform that champions free speech, positioning itself as a competitor not just to video-sharing giants like YouTube, but also to mainstream cloud computing services. This ambition was underscored by Rumble’s recent announcement that it has officially launched its cloud computing services, open now to the general public.
The excitement around Rumble’s stock was further fueled when CEO Chris Pavlovski hinted on social media about the company’s ambitions to take over TikTok. This revelation comes at a critical juncture as the U.S. Congress contemplates a ban on TikTok unless ByteDance divests it, potentially paving the way for Rumble to step in.
The move to acquire TikTok is not just about expansion; it’s strategic. Former President Donald Trump has expressed concerns that banning TikTok might inadvertently empower Meta Platforms, another tech giant Rumble aims to rival. By acquiring TikTok, Rumble seeks to maintain the platform’s active presence and bolster its stance as a formidable alternative in the tech ecosystem.
However, while the TikTok acquisition news is sensational, investors might want to pay closer attention to Rumble’s foray into cloud computing. The financial dynamics of a TikTok deal appear challenging; TikTok’s U.S. operations alone are valued at a minimum of $40 billion, according to Bloomberg. In contrast, Rumble’s market capitalization stands at around $2 billion, with just $267 million in liquid assets as of its last quarterly report. This stark difference raises questions about the feasibility of such an acquisition without significant external partnerships.
More impactful in the long term could be Rumble’s entry into the cloud computing market. With industry projections estimating the infrastructure-as-a-service sector to reach $500 billion by 2030, even a small slice of this market could significantly impact Rumble’s valuation and growth trajectory.
Rumble is on a path of ambitious growth and expansion, venturing into competitive domains of video sharing and cloud computing. The journey promises to be both costly and challenging. Stakeholders and potential investors should look forward to more detailed insights on Rumble’s cloud services and overall strategic direction during its upcoming fourth-quarter earnings call on March 27, 2023.
