Tether Limited to Invest $775 Million in Video-Sharing Platform Rumble
A Strategic Partnership to Boost Decentralization Efforts
Tether Limited, a leading digital asset management company, is set to invest $775 million in video-sharing platform Rumble as part of a strategic partnership aimed at boosting decentralization efforts, according to a December 20 press release.
The news caused a sharp spike in Rumble’s stock, which surged in after-hours trading, climbing 35.89% to $9.77 despite having closed the regular session down 1.1% for the day to $7.19.
Pavlovski to Maintain Control
Under the agreement, Tether will purchase 103.3 million shares of Rumble’s Class A stock. Despite the sizable investment, Rumble CEO Chris Pavlovski will maintain his super-majority voting rights, and Tether will not have board representation.
Cantor Fitzgerald & Co. and Oppenheimer & Co. are advising Rumble, with legal counsel from Willkie Farr & Gallagher LLP. Tether is represented by McDermott Will & Emery LLP.
Rumble said it plans to allocate $250 million from the deal to strengthen its balance sheet and accelerate growth initiatives.
The remaining funds will finance a tender offer for up to 70 million shares of Rumble’s Class A Common Stock, priced at $7.50 per share — the same rate as Tether’s investment. The move is expected to provide liquidity for shareholders who choose to participate in the offering.
Strategy and Vision
Rumble CEO Chris Pavlovski highlighted the overlap between crypto and free speech communities, describing the partnership as a natural fit. He added that the investment will help the platform drive its “next growth phase.”
Tether CEO Paolo Ardoino echoed the sentiment, citing Rumble as an alternative to mainstream media platforms. He added:
“This investment reflects our shared values of decentralization and transparency. We anticipate collaborating on advertising, cloud services, and cryptocurrency payment solutions.”
Conclusion
The $775 million investment in Rumble is a significant development in Tether’s strategic plans to diversify its portfolio and promote decentralization efforts. The partnership also reflects the growing importance of alternative media platforms and the need for decentralized solutions. As the digital asset market continues to evolve, investors will be closely watching developments in this space.
FAQs
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What is the size of the investment? The investment is valued at $775 million.
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What percentage of Rumble’s Class A stock will Tether be purchasing? Tether will be purchasing 103.3 million shares, which represents a sizable stake in the company but will not give it majority control.
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Will Tether have any board representation? No, Tether will not have any board representation under the terms of the partnership.
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What are the uses for the funds? Rumble plans to use $250 million to strengthen its balance sheet and accelerate growth initiatives, while the remaining funds will be used for a tender offer of up to 70 million shares of Class A Common Stock.
