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 investment.
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 steadily declined, dropping 1% by market close on Friday. However, after news of Tether's investment broke, the stock surged 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 USDT-supported assets. For instance, in the third quarter of 2024, the company's net profit reached $2.5 billion. Thus, under the leadership of new CEO Paolo Ardiono, Tether is continually 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 communication. One of Tether's secret projects is helping to develop a peer-to-peer chat and video conferencing application called Keet, which uses technology created by Ardiono's other company, Holepunch.
Rumble stated it will use $250 million in funds to 'support growth plans.' The remaining funds will be used for self-tender, buying up to 70 million shares of Class A common stock at a price of $7.50 per share—matching Tether's investment price. Rumble's Chairman and CEO Chris Pavlovski will maintain control of the company and stated he will not sell more than 10 million shares. Tether will purchase a total of 1,033,333,333 shares.
'Many may not realize the strong connection between cryptocurrency and the free speech community, stemming from a passion for freedom, transparency, and decentralization,' Pavlovski stated in a release, 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 39% year-over-year increase, despite a net loss of $31.5 million (an increase from $29 million in the third quarter of 2023). Its monthly active users are approximately 67 million, primarily targeting conservative audiences. Rumble's cloud services 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 dealer manager for this transaction.