Key points:
- Rumble stock has risen 13.4% in 2022 despite social media stocks falling.
- The company has attained meme stock status and is valued at billions.
- Is Rumble stock a good stock to hold? Read on to find out.
The Rumble Inc (NASDAQ: RUM) stock price has risen 13.4% in 2022, in stark contrast to many other social media companies, such as Meta Platforms and Pinterest, that have seen their stock price plummet amid a slump in online advertising.
Rumble is a video-sharing platform that prides itself on being immune to cancel culture and has attained meme stock status, allowing its market value to balloon to $3.45 billion. Yet, the company generated a mere $9.5 million in revenues last year.
The question remains, is rumble worth the lofty valuation it is trading at? The answer largely depends on how you value your investments. From a value investor’s perspective, Rumble is not worth billions, given that it generates revenues in the single-digits category.
However, the value investor is unlikely to be the person buying Rumble shares. Instead, the company’s stock is popular among retail traders who want to stick it to the big boys by buying the stocks of the most shorted companies and pushing their prices higher.
The only catch behind the meme stock rally reasoning is that you should always try your best not to be left holding the bag as an investor. The investor who losses money when chasing a meme stock higher is the one who buys near the top, just before the stock collapses.
As shown in the Rumble stock price chart below, the share price has spiked higher multiple times but has quickly fallen back, leaving many who bought at the highs nursing losses. The trend will likely continue, given that Rumble’s value is based on retail investors buying and selling activities.
You will notice that most of the stocks held by institutions, which are usually large and stable companies, rarely make drastic moves simply because, unless you are a hedge fund, most institutions do not actively trade the shares they hold. Such investors tend to hold their stocks for long periods until the fundamental picture changes.
Rumble stock could be a good fit for speculators who thrive on the highs and lows provided by volatile meme stocks, but for serious investors, many other stocks offer decent returns at better valuations without the associated risks,
*This is not investment advice.
Rumble stock price.
Rumble stock is up 13.45% this year, but its price action has been marked by massive spikes higher.
