Rumble Inc. (RUM) stock saw a massive surge on Thursday, soaring over 25% in intraday trading. The video streaming platform's shares skyrocketed following the company's announcement of a significant investment deal with Tether, the company behind the Tether stablecoin cryptocurrency.
According to the details revealed, Tether has agreed to invest $775 million in Rumble by purchasing 103 million newly created shares at $7.50 per share. Rumble plans to utilize $250 million from the proceeds to fund growth initiatives, while the remaining amount will be used to buy back stock from existing shareholders at the same $7.50 price.
This influx of capital is seen as a positive development for Rumble, which has been posting substantial losses and rapidly depleting its cash reserves. In the third quarter alone, the company reported a net loss of $31.5 million and ended the period with $132 million in cash and short-term equivalents. The additional $250 million from Tether's investment is expected to extend Rumble's ability to fund operations for another two years based on its current cash burn rate.
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