Many people received gifts at the end of December, but Rumble founder and CEO Chris Pavlovski had a particularly lucrative holiday season. On December 20, Pavlovski’s alternative to YouTube, which boasts of its freedom of expression and is popular on the political right, announced a $775 million investment from cryptocurrency giant Tether. That caused Rumble’s stock to skyrocket more than 100% over the next week and made Pavlovski a billionaire.
Forbes estimates that Pavlovski is now worth around $1.3 billion, thanks to his 25% stake in Rumble (plus options to acquire an additional 6% stake with a bargain strike price of three cents per share). And Rumble’s volatile stock fell 17% to $13.43 per share on Friday, after closing at a peak of $16.27 on Dec. 26.
Forbes’ estimate of Pavlovski’s fortune does not include stock and earnout options that could increase his stake in Rumble to 44% if the company’s stock trades above $17.50 per share for 20 years. days in a 30-day period before September 2027, a scenario that now seems a little less far-fetched than it did a month ago. (Due to his status as founder of Rumble, Pavlovski owns a special class of stock that entitles him to 85% of the company’s voting power.)
“Stock strength has been driven by an improved balance sheet due to investment in Tether and the more favorable political environment for alternative media,” says Wedbush analyst Scott Devitt.
As part of the deal with Tether, which Pavlovski said in a press release would “put a rocket on Rumble’s back as we prepare for our next phase of growth,” Tether will inject $250 million into the platform’s bank account, which is not yet profitable, so that they can be used “to support growth initiatives.” The remaining $525 million of proceeds from the transaction, which values Rumble at just $7.50 per share, will be used to buy back up to a quarter of the company’s shares (including up to a 4% stake from Pavlovski). .
The cash injection couldn’t have come at a better time. Rumble reported net losses of more than $100 million for the first nine months of 2024, bringing its total losses since the beginning of 2023 to $218 million. Before the Tether deal, Rumble had burned through roughly two-thirds of the more than $300 million in cash it raised when it went public via a SPAC merger in September 2022. Now, with $250 million of Tether, Rumble can continue to sign lucrative contracts with right-leaning creators like Donald Trump Jr., Kimberly Guilfoyle and Russell Brand, as well as more apolitical creators like Dave Portnoy’s Barstool Sports (all of which already have agreements with the platform).
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Despite growth, Rumble still has declines in its shares
Born in Canada, Pavlovski got his start in commercial Internet from the ground up, creating websites as a teenager in Toronto in the late 1990s and early 2000s. In 2011, he founded Cosmic Development, an IT outsourcing company with offices in Serbia and in his parents’ home country, North Macedonia. It now has more than 250 employees, and Rumble, one of its 90 clients, paid Cosmic Development more than $2.5 million during the first nine months of 2024.
Pavlovski launched Rumble in 2013 as an alternative to YouTube that helped small creators with rights management. Then in 2020, conservatives frustrated by perceived censorship at Big Tech discovered the platform, growing its audience from 1 million to 21 million monthly users by the end of the year and fueling the company’s pivot toward its current culture. anti-cancellation and anti-Big Tech personality. In 2021, Narya, a venture capital firm co-founded by JD Vance with the help of Peter Thiel, invested $25 million in Rumble. The following year, the company went public through a merger with a SPAC, and Rumble’s stock closed at an all-time high of $16.81 per share on its first day of trading. The deal was facilitated by Howard Lutnick, the billionaire CEO of financial services firm Cantor Fitzgerald (which provides banking services to Tether and has reportedly invested in it) and Donald Trump’s nominee for commerce secretary.
From its new headquarters in Longboat Key, Florida, which opens in 2023, Rumble has spent the money it raised from SPAC investors to become a “mini Google,” as Pavlovski put it: building its own ad sales system. , acquiring a podcasting and live-streaming platform founded by David Sacks, a venture capitalist and Trump’s new AI and cryptocurrency czar (who now sits on Rumble’s board), and launching a service provider in the cloud. It has also paid conservative commentators, game streamers, sports creators and many other online personalities to use Rumble as their platform of choice, hoping to divert attention from Amazon-owned YouTube and Twitch.
The results of these efforts have been disappointing so far. Rumble’s average monthly users peaked in late 2022 at 80 million (up from 67 million in the most recent quarter). And despite its recent jump, Rumble stock is still down 20% since the end of its first day of trading in September of that year (versus a 70% gain for the tech-heavy Nasdaq). But Pavlovsky is not discouraged. On December 23, he reposted a clip of conservative Rumble commentator and investor Dan Bongino praising the rise of an anti-woke “parallel economy.” Pavlovsky highlighted one quote from the two-minute video in particular: “You can get on that train or you can get hit by it, because it’s coming.”
With reporting by Matt Durot.
This article was originally published in Forbes US
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