On December 2, Rumble, a Canadian online video platform plans to go public via a SPAC merger with CF Acquisition Corp VI (NASDAQ:CFVI). CFVI stock jumped on the announcement closing 8% higher last Thursday. The proposed transaction values the Rumble & CFVI merger at $2.1 Billion and is expected to close in the second quarter of 2022. Here’s everything investors need to know about the CFVI merger.
CFVI Merger Breakdown
What the merger means for Rumble and CFVI shareholders
The SPAC merger between Rumble and CFVI will combine both companies, trading under the name Rumble Inc. The funds raised by CFVI at IPO will be passed onto Rumble, to invest in the companies expansion strategy.
Assuming the transaction is successful, the CFVI merger will provide approximately $400 million in proceeds to Rumble. These funds are a combination of a PIPE offering of $100 million at $10.00 per share and $300 million of cash currently held in the trust account of CFVI.
When the transaction is complete, the CFVI ticker will change to Rumble’s ticker and shareholders of CFVI stock will convert to the combined companies shares.
The hype around the CFVI merger has also created an opportunity for the company to join forces with Trump media.
In December, Cantor Fitzgerald confirmed the link between Rumble and Trump Media. Cantor Fitzgerald CEO, Lutwick noted that Trump Media will use Rumble Services for Cloud Service Distribution, opening up a lucrative revenue opportunity for Rumble. Following the official partnership announcement, CFVI stock sky rocketed by 16%.
Is Rumble The Next Big Video Platform?
Over the past 10 years, we have seen the likes of Youtube and Twitch dominating the video platform market as a household name. Rumble aims to create a neutral platform that does not punish creators for their ideas. Over the years, Youtube has tightened their guidelines on censorship and monetisation, ultimately driving some creators off their platform.
In the third quarter, Rumble averaged 36 million monthly active users with 8 billion minutes watched per month. For comparison, Youtube currently have 2.3 Billion users accessing their platform at least once a month. Despite the scaling difference, Rumble aims to attract creators through the difference in their policy guidelines.
Similarly, we saw Trump Media announce their plans to launch a social media platform “Truth Social” to challenge cancel culture and the silicon valley giants. Whether or not these platforms will gain enough steam to survive in the cut throat tech industry is still up for debate.
“Rumble is designed to be the rails and independent infrastructure that is immune to cancel culture. We are a movement that does not stifle, censor, or punish creativity and believe everyone benefits from access to a neutral network with diverse ideas and opinions”.Chris Pavlovski, the Founder and Chief Executive Officer of Rumble.
CFVI merger: The Bottom Line
Overall, the CFVI merger will provide Rumble with roughly $400 Million to expand their business and grow their creator base.
The active user difference between Youtube and Rumble is significant, providing the market with some insight into how much Youtube dominates the video platform industry.
Nevertheless, Rumble will need to capitalise on their strategy to attract creators through the differences in their policies.
This is important because creators bring users, and acquiring large scale creators will significantly increase its monthly user base. At this stage, there is little information available regarding Rumble’s financial health. We will continue to update the CFVI merger article once Rumble release investor relations information.
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The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.