Rumble continues rallying in heavy volume trading after Tether joins as investor

Shares in conservative video content platform Rumble ( NASDAQ: RUM ) nearly doubled on Monday, extending Friday's post-market gains after it received a $775M investment from crypto firm Tether, which owns the namesake stable coin. The company said late on Friday it will use $250M of the proceeds to support growth initiatives and the remaining proceeds to fund a self-tender offer for up to 70M of its class A common stock, at the same price as Tether’s investment, which is $7.50 per share. Tether will own a minority position in Rumble’s outstanding common stock but will not have the right to designate any members of the board. Over 58.22 million RUM shares have changed hands just before 1 pm ET, nearly 22x its 3-month daily moving average. Short interest on the stock is 13.4%. RUM shares have nearly tripled in value so far this year while the benchmark S&P index has risen 24% for the same duration. Seeking Alpha analyst PropNotes said in an article from November that RUM's "core offering of charged political content is minimally monetizable, limiting revenue growth and advertiser appeal. The company's valuation at $1.7B is excessively high given its lack of profitability, poor unit economics, and competitive disadvantages." "We like the idea of shorting RUM shares, despite risks around the elevated short interest," the author wrote. RUM has no bullish ratings from Wall Street, Seeking Alpha Quant ratings and SA analysts on average. More on Rumble Rumble Inc. (RUM) Q3 2024 Earnings Call Transcript Rumble: Stay Away From This Stock At All Costs Rumble: Difficulties With Growth, Competition, And Profitability Biggest stock movers Monday: HMC, XRX, RUM, and more Rumble announces $775M strategic investment from Tether; shares jump