Tether CEO Paolo Ardoino said the investment is part of a wider commitment to “freedom tech”
Rumble (NASDAQ:RUM) stock catapulted 80% higher Monday morning as investors weighed the news that Tether, the blockchain platform behind the Tether (USDT-USD) stablecoin, agreed to invest $775 million in Rumble.
A press release disclosed that $250 million of the total $775 million strategic investment will be used to support/accelerate “growth initiatives” for Rumble’s video sharing and social media platform.
Another portion of the investment will fund a “self tender offer” for as many as 70 million shares of Rumble common stock as Tether’s investment”. The strategic investment and tender offer are anticipated to close in 2025’s first quarter.
Rumble CEO Chris Pavlovski’s “super-majority voting control” (controlling stake) in his company will not be impacted by Rumble’s agreement with Tether.
Furthermore, the deal with Tether will not affect Rumble’s existing board and governance structure. In other words, it currently does not appear that Tether is attempting to take an activist investor role in Rumble.
Analysis: A change in tone for Tether?
Rumble’s video sharing platform is known for supporting First Amendment rights and is sometimes considered to be conservative-leaning.
Previously, Tether was mainly known for its Tether stablecoin, a popular cryptocurrency that is pegged to the U.S. dollar. With the Rumble transaction, however, onlookers might wonder whether Tether is attempting to shift its tone.
In an interview with Fortune, Tether CEO Paolo Ardoino characterized the company’s investment in Rumble as part of a larger commitment to his belief in “freedom tech.” Per a Fortune interview, this commitment “includes cryptocurrency and communication platforms that allow people to express themselves without censorship by governments or big companies”.
Moreover, in the aforementioned press release, Ardoino posited that “in today’s world, legacy media has increasingly eroded trust, creating an opportunity for platforms like Rumble to offer a credible, uncensored alternative”. Thus, it sounds like Tether may be taking a stance against traditional media outlets with its Rumble investment.
It might surprise some Tether holders to discover that Ardoino and Tether are taking a strong, vocal stance on social and political issues. Could this mark a new direction for Tether, signaling intentions to expand the company’s horizons beyond its dollar-pegged stablecoin?
That’s a surprisingly risky proposition for a company with a relatively stable crypto token. Still, today’s traders are evidently in a risk-on mood regarding the Tether-Rumble deal, bidding Rumble stock to its highest price of the year.
