Rumble Stock Is Ripping Higher Monday: What's Going On?

Rumble Inc. RUM shares are trading higher Monday after the company announced it entered into a definitive agreement for a $775 million strategic investment from Tether USDT/USD.

The Details: Rumble on Friday announced that Tether plans to buy 103.33 million shares of its common stock for $7.50 per share, representing $775 million in gross proceeds. Tether offers the most widely used dollar stablecoin with more than 350 million users. 

Rumble plans to use $250 million of the gross proceeds to support growth initiatives, while the remaining funds will be used for a self-tender offer of up to 70 million Rumble shares at the same price as Tether’s investment.

Rumble CEO Chris Pavlovski does not intend to sell more than 10 million shares of common stock in the tender offer. He will retain his controlling stake in the company.

“I could not be more excited about this collaboration with Tether for a number of reasons. First, many people may not realize the incredibly strong connection between the cryptocurrency and free speech communities, which is rooted in a passion for freedom, transparency, and decentralization,” Pavlovski said.

“Second, the immediate commitment of adding $250 million in cash to our balance sheet not only confirms the level of support and commitment to a collaboration between our companies, it also fuels our growth initiatives. And, third, this transaction provides an immediate liquidity event for all of our stockholders who elect to participate in the self tender offer.”

Rumble’s existing board and governance structure, including Pavlovski’s super-majority voting control, will remain unchanged following the closing of the transaction.

Tether will own a minority position in Rumble’s outstanding common stock, but will not have the right to designate any members of the board. The investment and tender offer are expected to close during the first quarter of 2025.

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RUM Price Action: At the time of writing, Rumble shares were up 79.8% at $12.92, according to data from Benzinga Pro.

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