Right-wing social platforms rally after reports of Trump indictment, quarterly results

By Bill Peters

Quarterly results from Rumble were better than expected, helped by user engagement and the midterms

Shares of Rumble Inc. and Digital World Acquisition Corp. -- both social-media-focused companies seeking to galvanize right-leaning users -- raced higher after hours on Thursday following reports that a grand jury in Manhattan voted to indict former President Donald Trump

The indictment, still under seal, is likely to be made public in the days ahead, the New York Times reported. It follows the Manhattan district attorney's investigation into hush money paid to porn star Stormy Daniels.

Trump, in a statement, called the action "unthinkable" and suggested the indictment was an effort to derail his run for president. He accused the Democrats of "indicting a completely innocent person in an act of blatant election Interference."

Shares of Rumble (RUM) were up 16% after hours, although those gains initially spiked nearly 30% after the company reported stronger-than-expected fourth-quarter results. Digital World Acquisition Corp. (DWAC) -- the company planning to take public Trump's social-media ventures and his Truth Social platform -- rose 12%.

The results, and the stock movement, arrive as right-wing social platforms have struggled to gain ground against far-larger rivals like Twitter or Meta Platforms Inc.'s (META) Facebook. Those smaller platforms -- or the people on them driving engagement -- have suffered from technical and legal issues, and bans or restrictions following the spread of misinformation.

Rumble, a video-focused platform pitches itself as a creator of "technologies that are immune to cancel culture," said its fourth-quarter earnings report that the results were helped by an increase in user counts and interest during the U.S. midterms in November.

The company reported a net loss of around $945,000, but broke even on a per-share basis. That compared with a $10.5 million net loss, or 6 cents a share, in the fourth quarter of 2021.

Revenue came in at $19.9 million during the quarter, compared with $2.9 million in the prior-year quarter. Average monthly active users jumped to 80 million. At the end of the fourth quarter of 2021, they stood at 33 million.

The two analysts polled by FactSet expected Rumble to report a per-share loss of 2 cents, on revenue of $10.2 million.

The company said it has launched new notification features for iOS and Android, and new interfaces on Android and Roku, as well as a platform that allows creators on the site to upload articles. It has also expanded video advertising and moved into sports content, following a partnership with Power Slap -- a slap-fighting organization founded by UFC President Dana White whose second and third seasons will stream exclusively on the platform.

"Creators continue to realize the opportunity that Rumble offers, which is evident in the recent addition of mega-influencers to our Rumble Exclusives lineup, such as Steven Crowder and Dave Rubin, and by our successful entry into live sports," Chief Executive Chris Pavlovski said in a statement.

"Our efforts are already yielding results -- the U.S. midterm elections drove interest in news and politics, a core content vertical for Rumble, leading to substantial growth across our key performance indicators in November 2022," he said.

The platform has also drawn interest from conservative personality Steven Crowder and comedians like Russell Brand. However, the company, as with other social-media sites, has been criticized for distributing misinformation. An investigation from the news-ratings site NewsGuard, published in November, found that "Rumble frequently pushes videos from untrustworthy sources that traffic in election misinformation."

Rumble currently has a market value of roughly $3.6 billion. Billionaire investor Peter Thiel and J.D. Vance, the author of the memoir "Hillbilly Elegy" and a Republican senator from Ohio, are among the people who have invested in the company.

-Bill Peters

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03-31-23 0712ET

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