RUM Stock Has Promise if You Can Stomach the Risk

Rumble (NASDAQ:RUM) is a relatively new social media business, and one particular short-seller is betting that the company will fail. Does this mean it’s time to abandon RUM stock, though? Not necessarily, as there are risks involved but also growth potential because Rumble is strategically developing its content streaming platforms, Rumble and Locals.

Rumble isn’t for everyone, since some folks might not agree with the company’s conservative viewpoints. Beyond that, there’s a financial firm that’s expressing serious doubts about Rumble’s prospects as a business venture.

It’s up to you to decide how valid the criticisms of Rumble actually are. At the end of the day, you should be confident in Rumble’s future if you plan to make an investment in this controversial but intriguing social media startup.

All RUM Stock Investors Should Read This Short Report

As you might surmise from the firm’s name, The Bear Cave is a short-seller with a bearish slant on certain businesses. Among those businesses is Rumble, and The Bear Cave issued a harsh report on the company.

It’s probably a good idea for any current or prospective RUM stock investor to read the short report. This doesn’t mean you have to agree or disagree with the report. The important thing is to be aware of what’s being said about Rumble.

The critiques come quickly, as the report’s first paragraph calls Rumble “largely YouTube for hyper-conservatives.” This may be an exaggerated characterization of Rumble’s user base, however. Some people might turn to Rumble and Locals simply because they find other platforms to be too restrictive.

The Bear Cave’s report further claims that Rumble “has struggled to move into mainstream content.” But then, Rumble isn’t necessarily trying to be “mainstream,” as the platform has a niche appeal.

Additionally, The Bear Cave declares that Rumble’s “financial progress has been slow,” but this isn’t unusual for a startup business. Granted, investors should take note of Rumble’s financial risks as a developing company, and therefore shouldn’t take a large position in RUM stock.

Rumble Is Proactively Developing Its Platform

Besides, it’s not as if Rumble is just sitting by idly, bleeding money. The company is working hard to develop its platform, as demonstrated by multiple recent press releases:

• Locals launched Content+, a feature that “allows creators to monetize movies, specials, and other on-demand content.”
• Rumble introduced a beta version of pre-roll video ads on its Rumble Advertising Center.
• The company now provides notifications about livestreams to users of Rumble’s iOS and Android applications.
• Plus, the company recently opened Rumble.Store, an online store that’s “dedicated to official Rumble merchandise.”

In other words, Rumble is taking steps to look and feel more like a legitimate, “real” content streaming platform. Again, the purpose isn’t necessarily to “move into mainstream content,” but to carve out a niche as Rumble strives to build a loyal following.

Takeaway: Mind the Risks, but Consider a Small Position

RUM stock gets a “B” rating because the Rumble and Locals platforms have growth potential. As Rumble takes steps to build out its social media presence, this could lead to share-price appreciation over time.

Just be aware that there are risks involved with a controversial startup like Rumble. So, read The Bear Cave’s short report, but ultimately make your own decision as to whether you’re ready to take a small position in Rumble.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.