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Key Takeaways
- Rumble received a $775 million cash injection from cryptocurrency company Tether.
- Rumble explained that Tether would be purchasing 103.3 million shares at $7.50 each, although CEO Chris Pavlovski would remain the majority shareholder.
- The company said it would use $250 million of the proceeds to support growth initiatives, with the rest to pay for a self tender offer of its Class A shares.
Rumble (RUM) shares skyrocketed 60% Monday morning after the video platform received a $775 million investment from Tether, operator of a cryptocurrency platform and creator of the stablecoin of the same name.
Rumble announced that Tether had purchased 103.3 million shares of Rumble for $7.50 each. It noted that the transaction would not change the status of Chief Executive Officer (CEO) Chris Pavlovski as majority stakeholder in the firm.
The company said it will use $250 million of the proceeds to “support growth initiatives and the remaining proceeds to fund a self tender offer for up to 70 million of its Class A Common Stock, at the same price.”
Pavlovski called Tether “the perfect partner that can put a rocket pack on the back of Rumble as we prepare for our next phase of growth.”
Tether CEO Paolo Ardoino added that along with the investment, his firm plans to form “a meaningful advertising, cloud, and crypto payment solutions relationship with Rumble.”
Oppenheimer Says Deal ‘Should Alleviate Investor Concerns Related to Liquidity’
Oppenheimer wrote in a note to clients that for Rumble, the deal “should alleviate investor concerns related to liquidity” ahead of positive free cash flow. It has a “perform” rating on the stock.
The transaction is expected to close in the first quarter of 2025.
Shares of Rumble soared 61% soon after the opening bell to $11.61, their highest level since November 2022.
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