Rumble (RUM) operates a free video platform that offers livestreaming features. Users can subscribe to the channels of their favorite creators and gain access to both free and paid content. Incorporated in 2013 as an alternative to YouTube, the company is valued at $6.3 billion on Wall Street and is headquartered in Longboat Key, Florida.
Rumble’s stock has traded sideways for the majority of the year. However, shares are up more than 100% over the past five trading days on major investment news. This has brought its year-to-date gain to 235%.
Tether Joins Forces With Rumble
So what is the major news driving 100%-plus gains in RUM stock?
Rumble got a major investment from stablecoin giant Tether (USDTUSD), worth $775 million. The move will see Tether purchase 103.3 million shares of the live-streaming company for $7.50 each.
The deal also includes a self-tender offer, allowing shareholders to sell up to 70 million of Rumble’s Class A common shares at $7.50 each, providing a rare liquidity opportunity for investors.
Rumble announced that it will use $250 million of the proceeds to support its growth plans including cloud services and its video sharing platform. CEO Chris Pavlovski labeled the deal a “rocket pack,” and the executive views it as a key step in its next phases of growth.
With Rumble known as an advocate for free speech and transparency and Tether for its decentralization, analysts view the deal as a growing relationship between crypto and freedom of speech as we head into President-elect Donald Trump’s second term.
Rumble’s Third Quarter Results
Rumble reported its third-quarter results last month on Nov. 12, posting revenue of $25.06 million. This was a big step up from last year’s $17.98 million, but it still missed analysts’ estimate of $29.26 million. On the earnings side, Rumble reported a net loss of $31.5 million, wider than prior-year’s $29.0 million loss. The company reported a loss per share of $0.15, wider than the estimate for a loss of $0.13.
Rumble ended the quarter with 67 million average monthly active users (MAUs), a 14 million jump from Q2 and a 9 million increase from the same quarter last year. However, average revenue per user was down to $0.33 from last quarter’s $0.37 per user. The company says that it anticipates such fluctuations as it is just beginning to monetize its user base and any user growth.
Analyst Ratings on RUM
Rumble’s stock isn’t very popular amongst analysts, with only two analysts providing coverage. They have a unanimous “Hold” rating, and shares are trading way above their mean price target of $8.
