According to reports from The Block: Tether, the world's largest stablecoin issuer, has made a 'strategic investment' of $775 million in the right-wing streaming platform Rumble.
Last month, Tether announced it would allocate up to $20 million from its excess cash reserves for Bitcoin investments.
This investment seems to indicate Rumble's further interest in the crypto industry, as Rumble announced last month that it would allocate up to $20 million in cash reserves for Bitcoin.
Following the Federal Reserve's recent interest rate news, Rumble's stock price has been steadily declining, dropping 1% at market close on Friday. However, after the news of Tether's investment broke, the stock surged by as much as 44.6% in after-hours trading.
Against the backdrop of rising interest rates, Tether has made substantial profits from the earnings of assets backed by USDT. For example, in the third quarter of 2024, the company's net profit reached $2.5 billion. Therefore, under the leadership of new CEO Paolo Ardiono, Tether is continuously making strategic investments, expanding into new areas such as AI, Bitcoin mining, and decentralized messaging.
Notably, Tether's investment in the video-sharing platform and cloud service provider Rumble reflects Ardiono's interest in combating censorship. One of Tether's secret projects is helping to develop a peer-to-peer chat and video conferencing application called Keet, which utilizes technology created by Ardiono's other company, Holepunch.
Rumble stated that it would use $250 million in funds to 'support growth plans.' The remaining funds will be used for self-tender offers, purchasing up to 70 million shares of Class A common stock at $7.50 per share—matching the investment price from Tether. Rumble's chairman and CEO Chris Pavlovski will maintain control of the company and stated he would not sell more than 10 million shares. Tether will purchase a total of 1,033,333,333 shares.
"Many people may not realize that there is a strong connection between the cryptocurrency and free speech communities, stemming from a passion for freedom, transparency, and decentralization," Pavlovski said in a statement, noting that this investment represents an 'immediate liquidity event for all our shareholders.'
In the third quarter, Rumble's revenue was $25.1 million, a year-over-year increase of 39%, although it reported a net loss of $31.5 million (up from $29 million in the third quarter of 2023). Its average monthly active users are about 67 million, primarily targeting conservative audiences. Rumble's cloud service business hosts Truth Social. Peter Thiel, Vivek Ramaswamy, and elected Vice President JD Vance invested in Rumble in 2021 at a valuation of $500 million.
Tether's counterparty Cantor Fitzgerald & Co. is acting as the placement agent and managing underwriter for this transaction.