What Happened?
Shares of video sharing platform Rumble (NASDAQGM:RUM) jumped 2.9% in the afternoon session after its partner and major shareholder, Tether, announced plans to use the video platform to launch a new U.S. dollar-backed stablecoin, USAT, in the American market. The plan centered on Tether's partnership with Rumble, in which it held a 48% stake after a $775 million investment made in 2024. As part of the collaboration, Rumble planned to integrate a crypto wallet into its platform that would support USAT, with a launch expected by the end of the year. This initiative aimed to introduce the new stablecoin to Rumble's 51 million monthly active users, a move intended to accelerate the mass adoption of USAT in the United States.
After the initial pop the shares cooled down to $7.29, up 2% from previous close.
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What Is The Market Telling Us
Rumble’s shares are extremely volatile and have had 51 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.6% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge. As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels. The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
Rumble is down 41.2% since the beginning of the year, and at $7.29 per share, it is trading 55.2% below its 52-week high of $16.27 from December 2024.
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