Plenty of people got presents at the end of December, but Rumble founder and CEO Chris Pavlovski had a particularly lucrative holiday season. On December 20, Pavlovski’s cash-strapped YouTube alternative, which claims the mantle of free speech and is popular with the political right, announced a $775 million investment from crypto giant Tether. That sent Rumble’s stock soaring by 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-basement exercise price of three cents per share). And that’s with Rumble’s volatile stock down 17% to $13.43 per share Friday, after closing at a peak of $16.27 on December 26.
Not included in Forbes’ estimate of Pavlovski’s fortune: “earnout” shares and options that could boost his stake in Rumble to as high as 44%, if the company’s stock trades above $17.50 per share for 20 days in a 30 day period prior to September 2027—a scenario that now seems a little less outlandish than it did a month ago. (Due to his status as Rumble’s founder, Pavlovski owns a special class of stock that entitles him to 85% of the company’s voting power.)
“The strength in the stock has been driven by [an] improved balance sheet [due to] the Tether investment and the more favorable political backdrop for alternative news outlets,” says Wedbush analyst Scott Devitt.
As part of the Tether deal, which Pavlovski claimed in a press release would “put a rocket pack on the back of Rumble as we prepare for our next phase of growth,” Tether will inject $250 million into the still-unprofitable platform’s bank account to be used “to support growth initiatives.” The remaining $525 million of proceeds from the transaction, which values Rumble at only $7.50 per share, will be used to buy back as much as a quarter of the company’s stock (including as much as a 4% stake from Pavlovski).
The cash injection couldn’t have come at a better time. Rumble reported net losses of over $100 million through the first nine months of 2024, bringing its total losses since the beginning of 2023 to $218 million. Prior to the Tether deal, Rumble had burned through about 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 a quarter billion dollars from Tether, Rumble can continue to sign lucrative contracts with right-leaning creators like Donald Trump Jr., Kimberly Guilfoyle and Russell Brand, plus more apolitical creators like Dave Portnoy’s Barstool Sports (all of whom already have deals with the platform).
Born in Canada, Pavlovski got his start on the commercial internet early on, building websites as a Toronto teenager in the late 1990s and early 2000s. In 2011, he founded Cosmic Development, an IT outsourcing company with offices in Serbia and his parents’ home country of North Macedonia. It now boasts over 250 employees—and Rumble, one of its 90 clients, paid Cosmic Development over $2.5 million through 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 in Big Tech discovered the platform, boosting its audience from 1 million to 21 million monthly users by the end of the year and prompting the company’s pivot to its current anti-cancel culture, anti-Big Tech persona. In 2021, Narya—a venture capital firm cofounded by JD Vance with Peter Thiel’s help—invested $25 million in Rumble. The next year, the company went public via a SPAC merger 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 for, and has reportedly invested in, Tether) and Donald Trump’s nominee for commerce secretary.
From its new Longboat Key, Florida headquarters, which opened in 2023, Rumble has spent the cash it raised from SPAC investors on becoming a “mini Google,” as Pavlovski put it: building out its own ad sales system, acquiring a podcasting and livestreaming platform founded by David Sacks—a venture capitalist and Trump’s new AI and crypto czar (who now sits on Rumble’s board)—and launching a cloud services provider. It has also paid conservative commentators, gaming streamers, sports creators and plenty of other online personalities to use Rumble as their platform of choice, hoping to draw eyeballs away from YouTube and Amazon-owned Twitch.
The results of these efforts have been disappointing so far. Rumble’s average monthly users peaked in late 2022 at 80 million (versus 67 million in the most recent quarter). And despite its recent jump, Rumble’s stock is still down 20% since the end of its first trading day in September of that year (versus a 70% gain for the tech-heavy Nasdaq). But Pavlovski isn’t deterred. On December 23, he reposted a clip of conservative commentator and Rumble investor Dan Bongino hailing the rise of an anti-woke “parallel economy.” Pavlovski highlighted one quote from the two minute video in particular: “You can get on that train or you can get run down by it—because it’s coming.”
With reporting from Matt Durot.
Read the full article here
