By Mackenzie Tatananni

Rumble stock surged in premarket trading Monday after the video streaming platform said it would receive a $775 million investment from cryptocurrency company Tether.

The stock surged 46% to $10.48, putting Rumble on track for its highest close since June 12, 2023, and marking the largest same-day percentagre increase on record, according to Dow Jones Market Data.

The company announced that Tether had agreed to purchase about 103.3 million shares at $7.50 a share. Rumble said it anticipates using $250 million to support growth initiatives. The remaining proceeds will fund a self-tender offer for up to 70 million Class A common shares.

"Tether's investment in Rumble reflects our shared values of decentralization, independence, transparency, and the fundamental right to free expression," Tether CEO Paolo Ardoino said in a statement.

"In today's world, legacy media has increasingly eroded trust, creating an opportunity for platforms like Rumble to offer a credible, uncensored alternative."

Tether issues what is known as a "stablecoin," or a cryptocurrency that is designed to provide a stable price point at all times. Tether tokens are pegged to real-world currencies like the U.S. dollar on a 1-to-1 basis.

News of the agreement came less than a month after Rumble's board approved the purchase up to $20 million worth of Bitcoin, with CEO Chris Pavlovski pledging to create "the leading video and cloud services platform for the crypto community."

Rumble was founded in 2013 as an alternative to YouTube. The company attracted the backing of conservative venture capitalists, and in 2021 received an investment from Narya Capital, a firm co-founded by incoming vice president J.D. Vance.

Rumble went public in 2022 after merging with CF Acquisition Corp VI, a special purpose acquisition company, at an initial enterprise value of $2.1 billion.

The platform has long branded itself a champion of "free speech" and "authenticity." In a blog post, Pavlovski asserted that the company's stance has differentiated it "from big tech platforms that continue to embrace 'cancel culture'."

However, Rumble drew criticism for hosting conspiracy theories about Covid-19 vaccines and voter fraud in the 2020 election. Last month, the company sued the California attorney general and secretary of state over a law requiring websites to remove or label "materially deceptive content" related to elections.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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December 23, 2024 08:02 ET (13:02 GMT)

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