LONGBOAT KEY, Fla. - Rumble Inc. (NASDAQ: RUM), a video sharing platform, has challenged the London Stock Exchange Group (LON:LSEG) over a calculation error that could lead to the company's exclusion from the Russell 3000 Index. Rumble's legal counsel, Michael J. Ellis, sent a letter to LSEG CEO David Schwimmer, highlighting discrepancies in the calculation of Rumble's voting rights and urging immediate rectification.
According to Rumble, the preliminary Russell 3000 Index published in late May 2024 omitted the company due to an alleged failure to meet the minimum voting rights requirement. Rumble asserts that LSEG's staff miscalculated the public shareholding of Rumble's class A common stock, which should qualify the company for inclusion in the index.
Rumble's investigation revealed that, contrary to LSEG's calculations, which accounted for only 13 million shares in public hands, the actual figure should include approximately 16 million class A shares controlled by Dan Bongino, an unaffiliated third-party shareholder, and about 30 million class A shares held by shareholders of the special purpose acquisition company (SPAC) with which Rumble merged in September 2022.
The company has reached out to LSEG multiple times to correct the error but claims that LSEG staff have consistently refused to address the issue, citing adherence to their process. Rumble's letter to LSEG raises concerns about the accuracy of the Russell 3000 Index and the potential impact on investors due to such errors.
Rumble's mission is to provide a neutral video platform and cloud services infrastructure, aiming to make the internet free and open. The company's challenge to LSEG's calculations comes at a critical time as the finalization of the Russell 3000 Index approaches.
In other recent news, Rumble Inc. has reported growth in its Q1 2024 earnings, highlighting the successful launch of two major projects, Rumble Cloud and Rumble Studio. The company has reported a substantial increase in its user base to 50 million monthly active users, despite a decrease in advertising revenues. The overall revenue for the quarter was $17.7 million, and Rumble Inc. is optimistic about reaching breakeven by 2025.
The company has also secured strategic partnerships and launched the Rumble Advertising Center. The company plans to use average revenue per user (ARPU) as a key metric moving forward. A second antitrust lawsuit has been filed against Google (NASDAQ:GOOGL), while Rumble Inc. maintains a strong cash position with $183.8 million.
The company is expecting sequential revenue increases in Q2 2024 and is focused on improving its product and user interface. Rumble Studio is expected to generate meaningful revenue growth in the future, and the company's strategic partnerships and the launch of Rumble Cloud have been well received in the market. These are the latest developments in the company's operations.
InvestingPro Insights
As Rumble Inc. (NASDAQ: RUM) seeks to clarify its position with the London Stock Exchange Group regarding its inclusion in the Russell 3000 Index, investors are closely monitoring the company's financial health and market performance. Here are some insights based on real-time data and expert analysis from InvestingPro.
Rumble's market capitalization stands at $1.64 billion, reflecting its scale in the video sharing platform industry. Despite significant revenue growth over the last twelve months, with an impressive increase of 53.11%, Rumble's financials indicate challenges in profitability. The company's gross profit margin is notably negative at -87.43%, underscoring the concerns raised by InvestingPro Tips about Rumble's weak gross profit margins. Additionally, analysts are not optimistic about the company's profitability in the near term, as Rumble is not expected to be profitable this year.
The stock has experienced volatility, with a 1-month price total return of -16.76% and a 3-month price total return of -31.49%, which aligns with the observation from InvestingPro Tips that the stock has fared poorly over recent months. This could be a point of consideration for investors looking at the short-term price movements of Rumble's shares.
Another metric of interest is Rumble's Price / Book ratio, which currently stands at 7.71. This is considered high and indicates that the stock is trading at a premium compared to the company's book value, a point highlighted by InvestingPro Tips as trading at a high Price / Book multiple.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available for Rumble Inc., which could provide further guidance on the company's financial position and stock performance. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable insights that could inform your investment decisions.
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