Why Rumble Stock Slumped 26.7% This Week
Shares of Rumble (NASDAQ: RUM) tumbled as much as 26.7% this week, according to data from S&P Global Market Intelligence. The alternative video platform posted strong user growth in the third quarter but a sharp operating loss, leading investors to sell the stock. As of 12:39 p.m. ET on Friday, Nov. 18, the stock is down 24.2% this week.
Rumble is an online video platform similar to YouTube, but with a focus on not censoring any content. The company is seeing strong user growth at the moment. In Q3, average monthly active users (MAUs) grew 97% year over year to 71 million, which is impressive for a platform so young. This is not nearly as large as YouTube, which has over 2.6 billion estimated active users, but it is a good start.
Revenue is also growing quickly, up 430% year over year to $11 million in the quarter. However, that is where all the good news ends. Rumble is highly unprofitable, generating an operating loss of $7.8 million in the quarter due to a huge increase in sales and marketing spending. Through the first nine months of 2022, the company has burned $22.8 million in free cash flow. With over $357 million in cash on the balance sheet, Rumble is in no danger of going out of business anytime soon, but it will have to turn a profit eventually and hasn't proven it can do so yet.
Source Fool.com
