CF Acquisition VI (NASDAQ: CFVI), the SPAC with a target on Rumble, sees its share price rise after Rumble CEO offered Joe Rogan a $100m four-year contract to leave Spotify (NYSE: SPOT).
What is CFVI?
CFVI is the ticker symbol for holding company CF Acquisition VI. It is a special-purpose acquisition company (SPAC) designed to take a private company public. The target company it intends to merge with is Rumble.
Financial-services firm Cantor Fitzgerald sponsors CFVI. CF Acquisition Corp. VI operates as a blank check company. The company was founded on 17 April 2020 and its headquarters are in New York.
What is Rumble?
Rumble is a YouTube competitor based in Canada. It was founded in 2013 by tech entrepreneur Chris Pavlovski. Billionaire tech magnate Peter Thiel has since backed the company.
Since the pandemic took hold, the video streaming platform has seen its membership soar. In July 2020, Rumble had 1.6 million monthly active users (MAU), which had climbed close to 32 million by March 2021.
Rumble's recent figures reported around 10.8 billion minutes watched, around 4,383 hours of uploaded video per day, and 39 million MAU in January, up 19% on its December numbers.
Rumble CEO Chris Pavlovski said:
“On the heels of the decline in U.S. and Canadian users at Facebook, and with Rumble’s impressive January growth, it’s clear that we are witnessing a major shift on the internet. Users are sending a clear message that platforms supporting the free and open internet will be the future,”
Rumble's mission is "to restore the internet to its roots by making it free and open once again."
And Rumble describes itself as:
“a high-growth neutral video platform that is creating the rails and independent infrastructure designed to be immune to cancel culture.”
When will Rumble IPO?
A Rumble IPO is expected to take place in Q2, 2022.
Is CFVI like DWAC?
CFVI has been compared to DWAC, another SPAC which is set to take former President Donald Trump's media company Truth Social public later this month. Digital World Acquisition Corp (NASDAQ: DWAC) saw its share price soar on news of the Truth Social reverse merger a few months ago.
Now CFVI is being likened to DWAC because it's potentially taking another controversial media figure public and giving them a platform to speak freely.
Trump and Rogan are not the same. Trump is controversial for his own actions. Rogan's controversies come from the people he interviews. Nevertheless, both have a large following, and in the conversation age, freedom of speech is driving their success.
Rumble also has dealings with Trump after confirming a partnership with Truth Social in December.
How does Rumble make money?
Rumble makes money from advertising revenue and fees from licensing its videos to brands and media publishers. This allows it to earn more for its content creators. Rumble's content partners include Reuters, EW Scripps, and PBS.
Rumble monetizes its content via ad revenue which it splits with platform users. In direct competition with YouTube, Rumble shares up to 60% of its ad revenue with its artists. YouTube only shares 10% to 15%.
Rumble on Dumb Money
Rumble CEO Pavlovski was recently interviewed on Dumb Money. He explained that Rumble took its first outside cash investment from Peter Thiel around April 2021.
Pavlovski also confirmed the share setup. 82.2% of existing Rumble shareholders will own equity in the new company. 11.5% will come from public stockholders of CFVI, 3.8% will be the PIPE investors and the CFVI sponsor, Cantor Fitzgerald, will own 2.5%.
Pavlovski himself will retain around 85% voting control of the company.
Rumble Google Controversy
Last January, Rumble sued Google for $2bn, accusing the search giant of rigging video search results to favor YouTube. Rumble claims the skewed search results caused it to lose advertising revenue.
Rumble Rogan Deal
On 7 February, Rumble CEO Chris Pavlovski wrote a letter to podcast host Joe Rogan, offering him the $100m contract.
The short note said:
"How about you bring all your shows to Rumble, both old and new, with no censorship, for 100 million bucks over four years?
This is our chance to save the world. And yes, this is totally legit."
Why is Joe Rogan Controversial?
Rogan has been hosting podcasts for years and joined Spotify exclusively in 2020. For this, he was paid $100m while retaining image rights. The decision to join Spotify has drawn criticism from the start, but in recent weeks it's escalated.
After Rogan interviewed some highly controversial guests that many believe spread COVID-19 misinformation, Spotify took the heat.
Famed artists Neil Young pulled his music catalogs from Spotify, and several artists have followed.
Adding fuel to the fire, Spotify has since removed around 113 episodes of Joe Rogan's podcast, while a mash-up of Rogan using racial slurs also emerged.
Is CFVI Stock a Good Investment?
SPACs are notoriously volatile investments. They often spike on initial interest and then fall back as the hype dies down. There are no guarantees Joe Rogan will leave Spotify to accept Rumble's offer. At this time, CFVI stock is a highly speculative investment.
If you're interested in SPAC investing, why not check out GGPI, the SPAC targeting Volvo's Polestar or DWAC stock.