There’s an unwritten rule that you should never talk about politics, religion or money if you’re in a professional setting or at a cocktail party. Unfortunately, we’re going to have to break that rule. That’s because we need to discuss two of the three since it was announced this afternoon that Rumble, the intended combination company of CF Acquisition Corp. VI (Nasdaq: CFVI), will begin allowing the Russian state-controlled news channel RT, to broadcast on its platform.
RT news has recently been either removed entirely or is facing significant restrictions from most of the major tech platforms, such as Twitter, Meta, Apple and Roku. Reddit recently banned all links to Russian state media in an effort to stop Russian propaganda in the war against Ukraine. Plus, there is an EU ban on RT which has led to its removal across multiple sites in that region.
The problem with RT is that it spreads disinformation by routinely broadcasting stories designed to put a “pro-Putin” spin on current events and to sow confusion and distress in the Ukraine. Hence, the bans.
Rumble, however, has billed itself as a platform “ immune to cancel culture“. As such, it has become a haven for the right-wing in the U.S., after some of its users have been restricted on other applications, but have found Rumble willing to give them a voice. Nonetheless, Rumble is still quite small when compared to other platforms.
But, if today’s press release was an effort to help build its viewership, it seems a very peculiar way to go about it. Mostly because it just seems odd that the preferred platform of right-wing conservatives is enabling the Russian media and what Reagan used to call the “Evil Empire”. Up is down, black is white, cats and dogs living together…you get the point.
However, politics aside, there is the question of what this could mean for CFVI. First off, the share price of CFVI closed UP $0.47 at $12.77, or 3.82%, on volume of 1,888,111 shares traded. If anyone thought today’s news would make the share price fall is not taking into consideration the shareholder base. Anyone who was already invested in CFVI for the Rumble transaction was most likely already a right-leaning investor. Today’s news was only capitalizing on the strong feelings of the right wing for “freedom of speech” as well as the predilection for going against anything suggested by the current administration.
Nonetheless, will there be blowback to Rumble/CFVI for allowing RT to broadcast? That’s actually not the right question. Rumble is most likely counting on blowback since that only fuels the right and as a result, their viewership numbers. The question instead is two-fold: 1) how many investors buy CFVI for political reasons 2) does the US institute a ban similar to the EU?
I’m not a political expert. In fact, I’m straight down the middle and don’t consider myself a member of either party, but…I could envision a scenario where an EU-like ban is put in place. However, that will come with significant political blowback as well in a nation highly divided already. But here’s the thing…a ban will most likely only help CFVI’s share price since Rumble will be able to then position themselves even further as a platform that was trying to enable free speech and was shut down. That’s red meat to the the political right and especially heading into a mid-term election. As for the other question regarding whether CFVI buyers will continue to buy for political reasons, that depends on how bad the war gets. At some point, we’d all like to believe that war atrocities will outweigh political leanings over free speech.
In other related SPAC news concerning Russia and the Ukraine war, Emerging Markets Horizon Corp. (Nasdaq: HORI) put out a press release today, but for VERY different reasons. The sponsor of Emerging Markets Horizon has VTB Bank PJSC, as the indirect parent of Nevsky Properties Limited, which owns 25% of the sponsorship of this SPAC. VTB is Russia’s second largest bank, and has been described as the “showpiece lender for Kremlin Inc’s international ambitions.” As a result of sanctions against Russia and Russian entities, HORI is, “currently evaluating the impact of the new sanctions on its current and future operations and will provide additional updates as soon as practicable.” Which may or may not be code for a potential “liquidation”. In this case, a liquidation would make a lot of sense. This team is essentially hamstrung and finding a new team to take over as sponsor would prove to be difficult from a D&O insurance perspective.
Plus, there is the question of how much a few million in at-risk capital actually means to Russian oligarchs and related entities right now. Two weeks ago the answer would have been, not much. Today? With the current sanctions? Hard to say, but clearly it’s significantly more painful.
All of this is to say…politics and money are probably going to be hot button issues for the foreseeable future. As if SPACs weren’t complicated enough…