Culper Research Targets Rumble: Alleges Inflated User Base, Reliance On Malware For Site Traffic

In a Twitter thread on Thursday, Culper Research, an independent investment research firm, outlined multiple concerns about Rumble Inc RUM, a video-sharing platform.

The thread alleges inconsistencies in Rumble's user base and ad revenue figures, as well as a reliance on malware to drive traffic. Culper Research has taken a short position on Rumble's stock, anticipating a decline in its value.

In the thread, Culper highlights apparent discrepancies in Rumble's claims about its user base. The firm cites a November 2020 talk in which Rumble CEO, Chris Pavlovski, stated that Parler had "significantly more" users than Rumble at the time. However, Rumble later claimed 21 million monthly active users (MAUs) in Q4 2020, contradicting Pavlovski's earlier statement and raising questions about the company's reported growth.

7) We think Pavlovski accidently admitted to $RUM's paltry user base in a Nov 2020 talk. He stated Parler grew to 5-10M users in Nov 2020, "significantly more" than $RUM. However, $RUM then claimed 21M MAUs in Q4 2020, clashing with those remarks and independent traffic data. pic.twitter.com/QdkGQr53ww

— Culper (@CulperResearch) April 27, 2023

Culper Research also alleges that Rumble relies heavily on malware to generate site traffic, estimating that 37% of its site traffic in March 2023 was driven by adware redirect programs rather than genuine user interest. This raises concerns about the validity of Rumble's traffic figures and makes the platform less appealing to legitimate advertisers.

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Culper criticizes Rumble's ad technology as outdated and ineffective, leading to the platform attracting primarily scam artists instead of reputable advertisers. For example, Rumble's largest outbound site is "Exipure," an apparent "weight loss supplement scam." Culper argues that Rumble's inadequate ad tech limits monetization potential and ultimately dooms the platform.

The research firm also questions Rumble's claims about owning its own data centers and being independent of major cloud infrastructure providers. Culper points out inconsistencies between Pavlovski's statements and information provided by Rumble's investor relations team. Additionally, the firm raises concerns about Rumble's C-suite hires and lack of a Big 4 auditor.

Finally, Culper mentions a $400 million lawsuit filed by a former investor, alleging that Pavlovski cheated him out of a 20% stake in the company. Any potential settlement could significantly impact Rumble's already dwindling cash balance. With these concerns in mind, Culper Research maintains its short position on Rumble, expecting the stock's value to decrease.

Benzinga reached out to Rumble for a comment on the Culper report.

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Price Check: Shares of Rumble are down 7.15% at $7.54 at the time of publication on Thursday.

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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