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Oppenheimer analyst Jason Helfstein notes that Friday post-close, Rumble (RUM) announced $775M equity investment from stablecoin operator Tether, with $250M in newly issued shares at $7.50 for growth capital. Furthermore, tender provides insiders an effective diversification without affecting share price. In the firm’s view, Rumble selling primary shares at attractive valuation to further bolster balance sheet, without a meaningful change in strategy, should alleviate investor concerns related to liquidity before reaching positive free cash flow. In conjunction with the company’s previously announced plan to purchase less than $20M of Bitcoin, this should bolster interest around crypto content/ads. Oppenheimer maintains a Perform rating on the shares given valuation ahead of more robust advertising/subscription sales.
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