Two conservative companies have joined forces. Rumble (NASDAQ:RUM), the video-sharing platform that bills itself as the right-wing answer to YouTube, has announced a partnership with Barstool Sports. The site that began as a Boston sports and gambling publication in 2003 has grown into one of the country’s most popular culture and lifestyle brands, especially among male consumers. Its founder, Dave Portnoy, has gained notoriety as both a media entrepreneur and an investor. While RUM stock is surging today as news of this deal trends, its growth is likely due much more to the momentum sparked by two political events: Donald Trump winning the Iowa caucuses and Florida Governor Ron DeSantis dropping out of the race. As a company closely linked to conservative politics, Rumble is usually impacted by any news that affects Trump.
Will the new Barstool Sports partnership have much of an impact on RUM stock in the short or long term? As of now, it doesn’t seem likely. But let’s take a closer look at this deal and assess what it could mean for investors.
What’s Happening With RUM Stock
As noted, RUM stock is enjoying an excellent trading day. As of this writing, it is up almost 30%, though it has lost some of the previous momentum. It is moving in solidarity with the leading “Trump trade” Digital World Acquisition Corp (NASDAQ:DWAC), the blank-check partner of the Trump Media and Technology Group (TMTG). Trump’s chances of winning the Republican primary are increasing, helping push the parent company of Truth Social upward. When DWAC goes, so does Rumble.
That said, Rumble is coming off a difficult year with very little growth. Shares have fallen more than 41% over the past two quarters, leaving investors with plenty of reason to be skeptical about its future prospects. There’s no denying that Barstool Sports is an extremely successful brand with a growing, motivated fan base. But given that it primarily appeals to white, male conservative users, there’s likely quite a bit of overlap between its fans and those who turn to Rumble for content. As such, joining forces may not lead to an influx of new fans for either platform.
On top of that, Rumble is currently facing a regulatory probe from the U.S. Securities and Exchange Commission (SEC) due to allegations of regulatory fraud. That’s likely to hang over the company for some time, further compromising its growth prospects. The fast-approaching election may help spur superficial momentum for the Trump trades, but that doesn’t make RUM stock a good buy, with or without Barstool Sports. There are better media stocks to buy for this important political event.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
