Why Rumble Stock Is Absolutely Crushing the Market This Week

What happened

Shares of video platform Rumble (RUM 10.53%) are up a whopping 63% this week, as of 2:10 p.m. ET on Friday, according to data provided by S&P Global Market Intelligence. For comparison, the S&P 500 is only up 3.6% over this time. Helping boost its full-week gains, Rumble stock was also up 15% on Friday alone even though there wasn’t any real news from the company.

So what

Regarding concrete news from the company, there were two official Rumble press releases this week. First, the company launched a merchandise store on Monday, where fans of the brand could pre-order T-shirts and hats. Today, Rumble announced that YouTuber JP Sears would put his new comedy special exclusively on Locals — a platform owned by Rumble — and create a subscription-based community. But for the record, this news was announced earlier in the week by Locals.

Rumble is seen as an alternative to Alphabet‘s YouTube platform and the company aspires to have a cloud product comparable to Amazon‘s Amazon Web Services. Both companies reported financial results this week and both stocks fell immediately afterward. It’s possible that investors are interpreting this perceived weakness from Alphabet and Amazon as Rumble’s opportunity.

Moreover, Rumble stock was down about 26% last week on an independent report that questioned the business. With that big of a recent drop, part of this week’s gain was simply a bounce-back after the market had a weekend to digest the news.

Now what

I would argue that nothing fundamentally changed for Rumble last week or this week. A merchandise store and a comedy special are pieces in a puzzle, yes. But they’re small pieces. The biggest driver this week: The market is still trying to figure out what Rumble is worth and that will continue to influence the stock price in the short term.

Over the long term, Rumble has the challenging task of keeping its user-growth momentum going while finding ways to effectively monetize its users and fund its ambitious growth plans. Anyone buying the stock today with the belief it can challenge the likes of Amazon and Alphabet should buckle up for a long journey that will certainly be filled with good weeks and bad weeks.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jon Quast has positions in Amazon. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy.

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