Shares of Rumble, a growing tech company, have reached their highest point in a year, rising about 300% since January. This surge is largely due to a significant investment of $775 million from Tether, the firm behind the major cryptocurrency stablecoin, Tether (USDT). Tether, now the third-largest cryptocurrency, boasts a Market cap of nearly $140 billion and aims to maintain a stable value equivalent to the U.S. dollar. While Rumble has ambitious plans to create uncensored internet infrastructure and compete with giants like YouTube and AWS, it has faced financial challenges, posting substantial losses. The new funding from Tether alleviates concerns about its liquidity, providing Rumble with more time to grow and innovate.
Shares of technology company Rumble, listed on NASDAQ under the ticker RUM, have reached a new 52-week high, soaring nearly 300% since their lowest point in January. This impressive gain can largely be attributed to a substantial $775 million investment from Tether Limited, known for its cryptocurrency stablecoin Tether (USDT). Tether stands as the third-largest cryptocurrency globally, trailing only Bitcoin and Ethereum, with a Market cap nearing $140 billion.
Tether’s unique position as a stablecoin means it aims for a consistent price alignment with the U.S. dollar. Users deposit dollars to receive Tether tokens, providing a less volatile way to engage with cryptocurrencies. Tether maintains robust reserves – around $125 billion as of late September 2023 – primarily held in U.S. Treasury bills. This strategy not only protects against potential redemptions but also generates profits for Tether.
According to Tether’s CEO, Paolo Ardoino, the company is on track to earn around $10 billion in net profit for 2024. This financial success allows Tether to make strategic investments, such as its recent backing of Rumble.
Rumble generated buzz when it went public in 2022, promoting ambitious goals to create an internet infrastructure free from censorship, challenging major players like YouTube and Amazon Web Services. However, building such a vision comes with significant costs. Rumble recorded a net loss of $116 million in 2023, with further losses of $102 million in the first three quarters of 2024.
Despite these challenges, Rumble hasn’t diluted its shareholders or accumulated debt. Instead, it has relied on its cash reserves to fund operations. The recent investment from Tether has alleviated concerns about Rumble’s liquidity, sparking an increase in its stock price.
Currently, Rumble boasts 67 million monthly active users, although this figure reflects a slight decline from previous years. While the company has introduced a premium subscription service to bolster revenue, advertising remains crucial for its growth.
Investors can find optimism in Rumble’s longer runway thanks to Tether’s investment, allowing the company to pursue its vision despite ongoing challenges in advertising demand. The cash influx gives Rumble a better chance of establishing itself in a competitive landscape, which ultimately benefits its shareholders.
What company just got a big investment?
The company that just received a massive investment is a smaller firm aiming to compete with YouTube and AWS, the big players in video and cloud services.
How much did the investment amount to?
The investment totaled $775 million, which shows strong belief in the company’s potential to grow and innovate.
Who invested this money?
The investment came from the company behind the world’s third-largest cryptocurrency. This highlights the investor’s interest in tech and digital services.
What does this company do?
The company is developing a platform similar to YouTube and AWS, focusing on video hosting and cloud computing services, offering more options and potentially lower costs.
Why does this investment matter?
This investment is significant because it could change the landscape of online video and cloud services, giving users more choices and creating competition among major platforms.
