Tether Invests $775 Million into Video Platform Rumble
Tether, the company behind the USDT stablecoin, has dug deep into its treasure trove, investing a staggering $775 million into Rumble. This investment isn't just a financial injection; it's a statement of confidence in the intersection of crypto and free speech.
The announcement came at a time when Rumble's stock had been on a downward trajectory, bruised by the Federal Reserve's recent interest rate hikes. As the market closed on Friday at 4:00 p.m. ET, Rumble's shares were down by a modest 1%. However, the afterglow of Tether's investment news saw the stock leap an astonishing 44.6% in aftermarket trading, a testament to the market's enthusiasm for this strategic alliance. Just last month Rumble introduced Bitcoin as part of its treasury.
Tether's venture into Rumble is not merely about spreading its wings but also about nurturing an ecosystem where censorship-resistant communication can thrive. Tether's CEO, Paolo Ardiono, has been steering the company towards new horizons in AI, Bitcoin mining, and decentralized messaging. His other venture, Holepunch, is developing ‘Keet’, a peer-to-peer chat and video conferencing app aimed at preserving privacy and free speech.
Rumble's Growth Strategy with Tether's Capital
Rumble plans to channel $250 million of the investment into bolstering its growth initiatives. This capital infusion will not only expand Rumble's operational capabilities but also enhance its competitive edge in the video-sharing and cloud services markets. The rest of the funds are earmarked for a self-tender offer, allowing Rumble to buy back up to 70 million shares of its Class A common stock at $7.50 per share, aligning with the investment price from Tether.
Chris Pavlovski, Rumble's chairman and CEO, remains at the helm, retaining control over the company. He's committed to selling no more than 10 million of his shares, ensuring that his vision for Rumble continues to guide its path. Pavlovski sees this partnership as more than just financial; it's a symbolic bridge between the cryptocurrency and free speech movements, both advocating for freedom, transparency, and decentralization.
Despite the financial upswing, Rumble's financials present a mixed picture. In the third quarter, the company reported a revenue increase to $25.1 million, a significant 39% rise year-over-year. However, this growth was overshadowed by a net loss of $31.5 million, slightly up from the previous year. With approximately 67 million monthly active users, Rumble caters predominantly to a conservative demographic and also hosts Truth Social on its cloud services platform.
The involvement of notable figures like Peter Thiel, Vivek Ramaswamy, and Vice President-elect JD Vance in Rumble's 2021 funding round at a $500 million valuation further underscores the platform's draw among influential tech and political circles.
Cantor Fitzgerald, Tether's counterparty, is managing the deal, ensuring that this investment translates into strategic growth and market stability for Rumble. This partnership could very well be the rocket fuel that propels Rumble into a new era of digital communication, where the ethos of free speech and financial freedom intersect with cutting-edge technology.