Rumble Stock Surges After $775M Strategic Investment From Tether: Retail Confidence Improves

Right-leaning video-sharing platform Rumble Inc.'s ($RUM) shares jumped over 50% in Friday’s after-hours session after the Longboat Key, Florida-based company announced a strategic investment

Rumble, touted as rival to Alphabet's YouTube, announced a definitive agreement for a $775 million strategic investment from cryptocurrency company Tether ($USDT). Tether, the largest cryptocurrency by volume and holding 70% of market share among stablecoins, will buy 103.22 million Rumble Class A stock at $7.50 per share.

Rumble said it will use $250 million of the proceeds to support growth initiatives and the remaining to fund a self-tender offer for up to 70 million of its Class A common stock at $7.50 per share, the same price as Tether’s investment. The company also added that certain Rumble stockholders have signed support agreements committing to tender 70 million shares in the aggregate, subject to the same proration and other terms of the tender offer that apply to all Rumble stockholders participating in the tender offer. 

Following the completion of the transaction, Rumble CEO and Chairman Chris Pavlovksi will retain his controlling stake in the company. He has also committed to tender but does not intend to sell more than 10 million shares.

Delving into the investment's benefits, Pavlovski said it exemplifies the strong connection between cryptocurrencies and free speech communities, and the $250 million added to Rumble’s balance sheet will fuel growth initiatives. 

He added that the transaction provided immediate liquidity for Rumble shareholders who elected to participate in the self-tender offer

Paolo Ardoino, CEO of Tether, said, ‘Rumble’s dedication to fostering open communication and innovation makes them an ideal ally as we continue building the infrastructure for a more decentralized, inclusive future.”

‘’Beyond our initial shareholder stake, Tether intends to drive towards a meaningful advertising, cloud, and crypto payment solutions relationship with Rumble.”

RUM sentiment and message volume December 23, 2024,  as of 1:46 am ET | Source: Stocktwits

Retail sentiment toward Rumble stock remained bullish (72/100) following the deal announcement, with retail chatter growing to ‘high.’

One Stocktwits platform user said Rumble will be a cash cow, with ad and cloud revenue growing rapidly and lean company structure.

Another expects the stock to double over the next four years of Trump’s presidency, calling it an “alpha opportunity.”

Rumble stock, which ended Friday’s session down 1.10% to $7.19, jumped 50.21% to $10.80 in after-hours trading. The stock has gained 60% this year. 

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