YouTube competitor Rumble (NASDAQ: RUM) has struck a deal with stablecoin issuer Tether for a $775 million strategic investment.
The agreement was announced Friday evening, with Rumble outlining plans to allocate $250 million to support its operations and the remaining funds for a tender offer to buy back up to 70 million shares of its common stock at $7.50 per share.
The tender offer price matches the per-share amount Tether is paying for its stake in Rumble. The step is part of the USDT issuer’s broader plan to diversify beyond its profitable stablecoin operations.
Rumble CEO Chris Pavlovski said, “I truly believe Tether is the perfect partner that can put a rocket pack on the back of Rumble as we prepare for our next phase of growth.”
Tether CEO Paolo Ardoino highlighted the collaboration’s potential, citing the erosion of trust in traditional media as an opportunity for platforms like Rumble to offer “a credible, uncensored alternative.” Ardoino added that Tether plans to deepen its involvement with Rumble through advertising, cloud services, and cryptocurrency payment solutions.
The announcement sent RUM shares soaring, with after-hours trading seeing a 41% jump to $10.13.
While it remains unclear if any of the investment proceeds will be used to add Bitcoin to Rumble’s balance sheet, Pavlovski previously hinted at exploring Bitcoin acquisitions. In November, he teased the possibility of his company entering the cryptocurrency space.
According to Ardoino, Tether currently holds a staggering $100 billion in U.S. Treasuries, over 82,000 Bitcoin worth roughly $5.5 billion, and 48 tons of gold to back its USDT stablecoin. This breakdown comes as Ardoino directly refuted claims that Tether is under investigation, dismissing a Wall Street Journal report suggesting the firm might be facing scrutiny for anti-money laundering and sanctions violations.
Tether revealed it generated $2.5 billion in profit during the third quarter of 2024, boosting its nine-month profit to $7.7 billion.
According to Tether’s latest report, the firm saw a surge in its stablecoin issuance, reaching nearly $120 billion USDT in circulation — a new all-time high and a 30% increase for the year.
Tether CEO also pointed out what he sees as a lagging regulatory approach in the U.S., which he believes has forced many crypto firms to seek friendlier jurisdictions overseas. However, he hopes that regulatory attitudes could shift following the 2024 U.S. presidential election.
U.S. authorities are reportedly investigating Tether, the company behind the world’s largest stablecoin, USDT, for allegedly violating anti-money laundering regulations and sanctions.
