Rumble Inc. Sees Stock Price Surge Following $775 Million Investment from Tether
Shares of Rumble Inc. (NASDAQ:RUM) have skyrocketed by 44% pre-market, reaching new heights after Tether USDT/USD announced its substantial investment of $775 million. The investment deal comprises Tether acquiring 103.33 million shares of Rumble Class A common stock at $7.50 per share, bringing the total gross proceeds to this impressive figure.
This significant move highlights the intersection of cryptocurrency and the promotion of free speech, making it particularly noteworthy. Rumble intends to allocate $250 million of the investment for growth initiatives to solidify its standing as a key player within the free speech video-sharing domain. The remaining funds will be directed toward a self-tender offer to repurchase up to 70 million shares at the same valuation of $7.50 each.
CEO Chris Pavlovski elaborated on the alignment between cryptocurrency advocates and free speech, emphasizing the importance of decentralized platforms. Tether CEO Paolo Ardoino echoed this sentiment, addressing the growing mistrust among users toward traditional media outlets. He described platforms like Rumble as credible alternatives for uncensored content, encapsulating the fundamentals of their partnership.
"Rumble + Tether = Strong Partnership, Shared Values," Ardoino stated, reinforcing the mutual commitment to decentralization and transparency.
Despite the bullish nature surrounding Rumble's stock following the Tether investment, experts have cautioned investors to remain vigilant. At the time of writing, Rumble's stock price stood at $10.32, significantly above its eight-day and 20-day Simple Moving Averages (SMA) of $8.17 and $7.76 respectively, which points to short-term bullish momentum.
Technical indicators also support bullish projections with the company’s 50-day and 200-day SMA clocking at $6.68 and $6.37 respectively. The bullish signal is supported by the Moving Average Convergence Divergence (MACD) indicator of 0.53. Yet, the Relative Strength Index (RSI) has indicated potential overbought conditions, measuring at 71.96, highlighting the possibility of subsequent price corrections.
While cautious indicators present themselves, Rumble’s momentum coupled with Tether’s backing indicates potential for substantial long-term growth. Investors are urged to navigate short-term volatility with focus on the overarching growth strategies stemming from the newly acquired resources.
Notably, Rumble's stock previously traded as high as $10.31 earlier this week on significant volume estimations of over two million shares, after closing at $7.19. Despite these promising figures, some analysts remain reserved about the future performance of Rumble stock. Wall Street analysts at Wedbush have maintained a neutral rating with a target price set at $8.00.
Rumble has recently reported its quarterly earnings, highlighting discrepancies against analyst expectations. The company lost $0.15 per share, coming short of consensus estimates of $0.13 by $0.02, with revenues reaching $25.06 million—underperforming when compared to the anticipated figure of $29.25 million.
Insider transactions have also added complexity to the Rumble portfolio; on October 3rd, Director Robert Arsov sold 27,500 shares at $5.12. This sale resulted in a calculated reduction of ownership, with insiders having liquidated 169,988 shares over the past 90 days.
The investment dynamics at Rumble also involve several hedge funds adjusting their shares. Zurcher Kantonalbank Zurich Cantonalbank increased its holdings by 20.9% during Q3, owning approximately 30,962 shares, whereas financial institutions show varied inclinations toward Rumble shares. Notably, institutional investors control about 26.15% of Rumble stock.
Rumble operates globally, providing video-sharing capabilities within the United States, Canada, and internationally. Users can access rumble.com, which offers on-demand video content and live streams, showcasing the platform's commitment to enhancing user engagement with alternative content creators. The future looks promising for Rumble as it aims to uplift its position through innovative strategies fueled by the recent funding influx.
While Rumble enjoys immediate success post-Tether investment, the question remains whether it can sustain this newfound momentum. Both financial experts and users will be closely monitoring developments as they navigate the growth and volatility within the rapidly changing digital media space.
