Rumble (RUM, Financial), a video platform, saw its stock soar over 80% following a significant $775 million investment from cryptocurrency company Tether. The company plans to allocate $250 million from this funding to support its growth initiatives, while the remaining funds will be used for a self-tender offer to repurchase up to 70 million Class A common shares at $7.50 per share, matching Tether's investment price. Although Tether will acquire a minority stake in Rumble's common stock, it will not have the authority to appoint any board members.
Trading volume for Rumble shares exceeded 58.22 million, which is nearly 22 times its three-month daily average. The stock's short interest stands at 13.4%. Year-to-date, Rumble's stock has nearly doubled, significantly outperforming the S&P 500's 24% gain. Analysts have expressed concerns over Rumble's profitability, limited revenue growth, and competitive disadvantages, suggesting that its $1.7 billion valuation is too high.
