Rumble receives substantial financial boost from Tether – Stock surges

The technology company Rumble is currently causing a stir on the stock market. After Tether announced it would invest $775 million, Rumble's stock soared by an impressive 66%. With a valuation of around $2 billion, this investment represents a significant financial boost for the company. Rumble is currently experiencing financially challenging times and welcomes the support from Tether. So far in 2024, Rumble recorded a loss of nearly $102 million. One of the main causes is the negative gross margin of 59% this year, which means the cost of services exceeds the revenue generated from them. In addition, there are operating expenses that the company has to manage. By the end of the third quarter of 2024, Rumble had $131 million in cash and equivalents, which would have given the company about another year at the current spending rate. With the massive investment from Tether, Rumble now has significantly more financial leeway, which promptly led to increased demand for Rumble shares. An interesting detail: of the $775 million, only $250 million is directly flowing into the company to cover business costs. The remaining $500 million is intended to purchase shares from shareholders who want to sell their shares at a price of $7.50. Since the share price is now well above this price, few shareholders are likely to take up this offer. Even in the worst-case scenario, Rumble remains with $250 million in sufficient capital to further expand the business and solidly endure the coming years.