- The largest stablecoin issuer in the world, Tether, has invested $775 million in the right-leaning streaming service Rumble as a “strategic investment.”
- It declared last month that it would invest up to $20 million of its surplus cash reserves in bitcoin.
According to a Reuters wire, Tether, the biggest stablecoin issuer in the world, has made a $775 million “strategic investment” in Rumble, a YouTube alternative. Rumble, which declared last month that it will invest up to $20 million of its excess cash reserves in bitcoin, appears to be strengthening its focus on the cryptocurrency space with this move.
As the market closed Friday at 4:00 p.m. ET, Rumble’s shares, which had been declining steadily in response to recent Federal Reserve interest rate news, were down 1%. However, according to Yahoo Finance, the price surged as much as 44.6% in aftermarket trading following the announcement of Tether’s investment.
Tether’s earnings from yields on USDT’s underlying assets have increased dramatically in the face of rising interest rates. For example, the company’s net profit in Q3 2024 alone was $2.5 billion. Under the leadership of newly promoted CEO Paolo Ardiono, Tether has consequently been making an increasing number of strategic investments as the company has ventured into new industries such as decentralized messaging, artificial intelligence, and bitcoin mining.
Notably, Ardiono’s interest in censorship-resistant communications is reflected in Tether’s investment in the cloud services provider and video-sharing platform Rumble. Keet is a peer-to-peer video conferencing and chat program that is being developed with assistance from a Tether skunkworks team. Technologies developed by Holepunch, Ardiono’s other business, are used in the platform’s construction.
Rumble stated that $250 million of the money would be used “to support growth initiatives.” A self-tender offer for up to 70 million shares of the remaining capital fund’s Class A common stock is being made at $7.50 per share, which is the same price as Tether’s investment. Chris Pavlovski has stated that he will not sell more than 10 million shares of his company, and he will continue to keep a majority position in it. A total of 103,333,333 shares will be acquired by Tether.
Many individuals might not be aware of the close linkages between the free speech and cryptocurrency communities, which stem from a shared love of decentralization, freedom, and transparency. It should be noted that the investment serves as an instant liquidity event for all of our stockholders.
Despite reporting a $31.5 million net loss in Q3, Rumble generated $25.1 million in revenue, a 39% increase from the previous year. It mostly serves a conservative readership and has an average of 67 million monthly active visitors. Truth Social is hosted by Rumble’s cloud services division. In 2021, at a $500 million value, Vice President-elect JD Vance, Vivek Ramaswamy, and Peter Thiel invested in Rumble.
Cantor Fitzgerald & Co., a Tether counterparty, is serving as the deal’s dealer manager and placement agent.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
