Shares of Rumble, a technology company listed on NASDAQ, have surged about 300% recently, reaching 52-week highs, mainly due to a significant $775 million investment from Tether Limited, the entity behind the stablecoin Tether. Unlike typical cryptocurrencies, Tether maintains a stable value and has a Market cap of nearly $140 billion. While Rumble aims to create a censorship-free internet and compete with giant platforms like YouTube and AWS, it faces challenges, including substantial losses and a need to attract advertisers. Despite these hurdles, the infusion of cash from Tether offers Rumble a longer runway to pursue its ambitious goals and stabilize its financial situation.
Shares of technology company Rumble (NASDAQ: RUM) are surging, recently reaching 52-week highs after an incredible 300% increase since January lows. The big boost can be attributed to a substantial $775 million investment from Tether Limited, the firm behind the third-largest cryptocurrency, Tether (CRYPTO: USDT).
Tether has a Market capitalization of approximately $140 billion, trailing only Bitcoin and Ethereum. Unlike these two, Tether is a stablecoin, meaning it maintains a fixed value—usually pegged to the U.S. dollar. This provides a more stable way for investors to participate in the crypto Market without the usual volatility.
As of late September, Tether reported around $125 billion in reserves, largely held in U.S. Treasury bills. Having solid reserves allows Tether to manage withdrawals effectively while still generating profits. Tether’s CEO, Paolo Ardoino, has indicated expectations of a net profit of $10 billion in 2024, which is impressive for any company, especially in the cryptocurrency sector.
Rumble, known for its ambition to create a censorship-free internet infrastructure and to challenge major platforms like YouTube and AWS, has faced significant financial hurdles, with a net loss of $116 million in 2023 and another $102 million lost so far in 2024. Despite this, Rumble has been prudent with its funds; it hasn’t raised money through stock offerings or taken on debt, using cash reserves instead to fuel its growth.
The latest investment from Tether has alleviated concerns among investors regarding Rumble’s liquidity. With more financial leeway, Rumble can better focus on growing its user base, which stood at 67 million monthly active users in Q3 2024. While this number is down from 71 million in Q3 2022, it still represents a substantial and engaged audience.
Rumble faces the challenge of attracting advertisers to match its growing user base, as highlighted by CEO Chris Pavlovski’s concerns during the Q3 earnings call. The company is also working to boost revenue through its premium subscription service, acknowledging that advertising demand remains a significant obstacle.
In summary, Rumble’s future looks brighter thanks to Tether’s investment, giving it the financial runway needed to pursue its ambitious goals. For investors, the infusion of cash provides more time to see how Rumble can capitalize on its user base and grow revenue.
Key Takeaways:
– Rumble shares have surged 300% following Tether’s $775 million investment.
– Tether, a stablecoin, plays a crucial role in Rumble’s liquidity and growth potential.
– Rumble aims to compete with major tech platforms while managing financial losses.
– The company’s user base remains significant, but revenue growth from advertising is essential.
This recent development positions Rumble as an interesting prospect in the tech investment landscape, combining ambition with newfound financial support.
What company received a $775 million investment?
The company that got the investment is challenging big names like YouTube and AWS. It’s aiming to change how we use online video and cloud services.
Why did the cryptocurrency company invest in this little company?
The cryptocurrency company sees potential in this smaller company to grow and capture a large Market share. They believe it can offer better services than the current giants.
What makes this new company different from YouTube and AWS?
This company focuses on providing improved user experiences, lower costs, and more control to its users. They want to create a platform where content creators feel valued.
How will this investment affect users?
Users might enjoy better services and lower prices as the new company grows. It could lead to more choices for sharing videos and cloud storage.
When can we expect to see changes from this investment?
While it’s hard to predict specific timelines, the company plans to make improvements soon. Expect updates in their services over the coming months.
