Cantor Fitzgerald wins big on Tether’s investment in Rumble

Despite Rumble consistently losing money quarter after quarter, the financial firm stands to benefit from the announcement.

Jack Raines

12/26/24 3:23PM

On December 20, Rumble, the conservative video-sharing platform, announced that it had received a $775 million “strategic investment” from stablecoin platform Tether. The terms of this investment were… interesting:

“Investment: Tether has agreed to purchase 103,333,333 shares of Rumble Class A Common Stock at a price per share of $7.50, totaling $775 million in gross proceeds to Rumble. The Company will use $250 million of the proceeds to support growth initiatives.
Self Tender Offer: With the remaining gross proceeds, the Company will fund a self tender offer for up to 70 million shares of Rumble Class A Common Stock at a price per share of $7.50, net to the holder in cash. All holders of Rumble Class A Common Stock will be eligible to participate in the tender offer on the same terms. Certain Rumble stockholders have signed support agreements committing to tender 70 million shares in the aggregate, subject to the same proration and other terms of the tender offer that apply to all Rumble stockholders participating in the tender offer. Chris Pavlovski has committed to tender, and does not intend to sell more than 10 million shares of Class A Common Stock in the tender offer…
Timing: The investment and the tender offer are expected to close in the first quarter of 2025.”

Basically, only $250 million of the $775 million is actually an investment in the business, where the cash actually hits Rumble’s balance sheet. The other $525 million is funding a “self tender offer,” meaning that Rumble will be buying up to 70 million shares of its stock back from investors at $7.50 per share, and the deal is expected to close in Q1 of next year.

A couple of things to note here: first, by any conventional metric, Rumble is just a really, really bad business. In Q3 2023, it lost $29 million on $18 million in revenue, and in Q3 2024 it lost $32 million on $25 million in revenue. Through the first nine months of 2024, Rumble lost $102 million, and even after accounting for noncash expenses, its operating cash flow was still -$75 million. In total, the company’s cash and cash equivalents shrank from $218 million at the beginning of the year to $131 million at the end of September.

Essentially, despite revenue growth, Rumble’s losses have continued to grow even faster, its cash burn is high, and at its current pace the company would be running low on cash within the next 12 months. Given its cash needs, it’s no surprise that it would look to raise outside financing to the tune of $775 million. What is surprising, however, is that Rumble is then using $525 million to… buy back shares at $7.50. For context, the stock closed at $7.19 on December 20, and it had been trading below $7 for most of the year. Rumble needs cash on its balance sheet, so spending that cash to buy back stock feels counterintuitive.

But there is an interesting wrinkle here: Cantor Fitzgerald, the investment bank and financial services firm led by Howard Lutnick (Trump’s secretary of commerce appointee), advised on this deal. Cantor Fitzgerald was also the sponsor behind the SPAC that took Rumble public, and it still owns more than 9 million shares of Rumble, which hasn’t done too well in the public markets. Per Rumble’s press release, “certain Rumble stockholders have signed support agreements committing to tender 70 million shares in the aggregate,” and it was interesting to me that the company advising on this transaction happens to own a sizable stake in the company as well, meaning that it could benefit from being one of the shareholders selling into the tender offer.

Yet the reaction of Rumble’s stock price after the news hit complicated things. Rumble was trading around $7 before the investment was announced. $7.50 would be a premium to that price, so it’s likely that plenty of shareholders would be happy with the $7.50 deal. But since this investment was announced, Rumble’s stock price has jumped from $7.19 to $16.70, as of this writing.

If you’re a Rumble shareholder, why would you sell to a tender offer at $7.50 when you could sell on the open market for $16 or more? You’d be leaving $9 and change on the table per share, so it wouldn’t surprise me if we saw this deal either get renegotiated or pulled altogether.

Regardless of what happens, Cantor Fitzgerald feels like the big winner here. The bank gets transaction fees, the value of its Rumble stake has now doubled, and it could possibly sell its stake at a premium to its recent stock price, renegotiate the terms of the tender to a higher price, or, at a minimum, retain its now more valuable stock. Not bad.

Max Knoblauch16h

The Trump administration is reportedly planning a 50% made-in-America requirement for USMCA tariff relief

Qualifying for USMCA-related lower tariffs may soon require more US-made vehicle components, according to reporting by The Wall Street Journal.

The Trump administration is reportedly planning to introduce a 50% US content requirement for vehicles covered by the trade pact to receive lower tariffs. The content would be measured by cost, according to the WSJ.

There currently isn’t any US-specific requirement for those lower tariff rates, but in order to receive preferential tariffs, vehicles are must contain at least 75% regional content (components made in North America). Per Reuters reporting, the Trump admin is seeking to raise the regional requirement to 82%.

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Overall, Tesla will likely have the easiest time qualifying for any stricter requirements. The automaker’s vehicles contained the highest amount of US/Canadian content in 2025, according to American University research. Ford, GM, and Stellantis all scored lower.

Notably: the underlying government data that many domestic content measurements rely on intentionally combines US and Canadian components, so it’s difficult to know exactly how much of any given vehicle is specifically US-made.

Exclusive | Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Tom Jones22h

The $640,000 Luce makes the average Ferrari look like a bargain

Put aside the shape; put aside the smoothing out of Ferrari’s iconic sharp edges; put aside, even, the calls from former Chairman and President Luca Cordero di Montezemolo to “take the Prancing Horse off.” On the grounds of price alone, Luce detractors might have a point.

By now, many of us will have read the criticisms of Ferrari’s first fully electric vehicle, as the Luce — which was unveiled to the world earlier this week and promptly saw the company’s shares crash out in New York and Milan — gets subtly shaded by competitors online and not-so-subtly shaded by basically everyone else.

What makes all of this worse for Ferrari is that, even by the luxury car maker’s notoriously high standards, they’ve slapped a pretty hefty price tag on the Luce, and the company’s CEO, Benedetto Vigna, has already been forced to defend the €550,000 ($640,000) price point, saying yesterday that it’s “fair to pay for innovation,” per Reuters.

While Ferrari’s cars have been getting more expensive of late, as recently as 2022, Ferrari’s average revenue per car sold was around $340,000. At nearly twice that price, this new electric model is obviously proving a little much (visually, conceptually, and financially) for many loyal and long-standing fans of the Prancing Horse to stomach.