Tether Limited plans to invest $775 million in video-sharing platform Rumble as part of a strategic partnership aimed at accelerating decentralization efforts, according to a Dec. 20 press release. That's what it means.
Rumble stock soared on the news, jumping 35.89% to $9.77 in after-hours trading, despite ending the day's regular trading 1.1% lower at $7.19.
The transaction is expected to close in the first quarter of 2025, pending regulatory approval.
Pavlovsky maintains control
Under the agreement, Tether will purchase 103.3 million Class A shares of Rumble. Despite the large investment, Rumble CEO Chris Pavlovsky retains supermajority voting control and Tether has no board representation.
Cantor Fitzgerald & Co. and Oppenheimer & Co. are advising Rumble, along with legal counsel from Willkie Farr & Gallagher LLP. Tether is represented by McDermott Will & Emery LLP.
Rumble said it plans to use $250 million from the transaction to strengthen its balance sheet and accelerate its growth efforts.
The remaining proceeds will fund a tender offer for up to 70 million shares of Rumble's Class A common stock at a price of $7.50 per share (the same rate as Tether's investment). This move is expected to provide liquidity to shareholders who choose to participate in the offering.
Pavlovsky emphasized the overlap between the cryptocurrency community and the free speech community, saying the partnership is a natural fit. He added that the investment will help the platform drive its “next phase of growth.”
Tether CEO Paolo Ardoino echoed similar sentiments, calling Rumble an alternative to mainstream media platforms. He added:
“This investment reflects our shared values of decentralization and transparency. We look forward to collaborating on advertising, cloud services, and cryptocurrency payment solutions.”
Diversification efforts
The investment in Rumble is part of Tether's broader efforts to diversify beyond its core stablecoin business to better leverage its record profits and large treasury.
In recent months, Tether has expanded into infrastructure projects, artificial intelligence, renewable energy, and peer-to-peer communications platforms. The company has begun efforts to develop a Bitcoin mining operation that leverages sustainable energy sources and invested in AI-driven cybersecurity solutions.
Additionally, Tether considered blockchain-based payment networks and supported decentralized internet infrastructure to reduce censorship risks. These ventures reflect Tether's strategy to build a resilient digital ecosystem, consistent with the company's mission to foster innovation, financial inclusion, and decentralization.
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