Rumble Announces Bitcoin Treasury Strategy

Rhea-AI Summary

Rumble (NASDAQ:RUM) has announced a corporate treasury diversification strategy that includes allocating up to $20 million of excess cash reserves to Bitcoin. The Board of Directors approved this initiative as part of the company's expansion into cryptocurrency. CEO Chris Pavlovski cited Bitcoin's potential as an inflation hedge and its increasing institutional adoption as key factors behind the decision. The timing and value of Bitcoin purchases will be determined by management based on market conditions, Bitcoin's trading price, and Rumble's cash needs. The strategy can be modified or discontinued at any time.

Positive

• Strategic diversification of treasury with up to $20 million allocation to Bitcoin
• Potential hedge against inflation through cryptocurrency investment
• Expansion into cryptocurrency market aligns with company's growth strategy

Negative

• Investment in volatile cryptocurrency assets poses financial risk
• No guaranteed timeline or commitment for Bitcoin purchases
• Strategy implementation dependent on market conditions and company's cash position

Insights

Financial Strategy Analyst

This treasury diversification strategy marks a significant shift in Rumble's financial management approach. The $20 million Bitcoin allocation represents a calculated move to hedge against inflation and diversify cash reserves. The timing aligns with broader institutional adoption trends and favorable regulatory environment. However, the discretionary nature of purchases and multiple contingency factors suggest a cautious implementation approach. The strategy could enhance Rumble's market positioning in the crypto space while potentially providing protection against fiat currency devaluation. Key risks include Bitcoin's price volatility and regulatory uncertainties. For investors, this signals both opportunity and risk - potential upside from Bitcoin appreciation but exposure to crypto market volatility. The flexible implementation framework allows management to adjust based on market conditions, providing important risk management controls.

Cryptocurrency Market Analyst

This strategic move positions Rumble among forward-thinking companies embracing Bitcoin as a treasury asset. The decision reflects growing institutional confidence in cryptocurrency, particularly following recent regulatory clarity and ETF approvals. The $20 million allocation size is meaningful yet conservative, representing a balanced approach to crypto exposure. The company's plan to expand services for the crypto community could create synergistic benefits, potentially attracting new users and partners from the digital asset space. This dual strategy - using Bitcoin both as a treasury asset and as a business development tool - could create multiple value streams. However, success will largely depend on execution timing and Bitcoin's market performance.

LONGBOAT KEY, Fla, Nov. 25, 2024 (GLOBE NEWSWIRE) -- Rumble (NASDAQ:RUM), the video-sharing platform and cloud services provider, announced today that its Board of Directors has approved a corporate treasury diversification strategy of allocating a portion of the company’s excess cash reserves to Bitcoin. This move emphasizes Rumble’s belief in Bitcoin as a valuable tool for strategic planning and is designed to accelerate the company’s expansion into cryptocurrency. Rumble’s Bitcoin allocation strategy will include purchases, at the discretion of the company, of up to $20 million.

“We believe that the world is still in the early stages of the adoption of Bitcoin, which has recently accelerated with the election of a crypto-friendly U.S. presidential administration and increased institutional adoption. Unlike any government-issued currency, Bitcoin is not subject to dilution through endless money-printing, enabling it to be a valuable inflation hedge and an excellent addition to our treasury,” said Rumble Chairman and CEO Chris Pavlovski. “We are also excited to strengthen our ties with crypto and to bolster our efforts to become the leading video and cloud services platform for the crypto community,” Pavlovski added.

The actual timing and value of Bitcoin purchases, if any, under the allocation strategy will be determined by management in its discretion and will depend on several factors, including, among others, general market and business conditions, the trading price of Bitcoin and the anticipated cash needs of Rumble.  The allocation strategy may be suspended, discontinued or modified at any time for any reason.

ABOUT RUMBLE

Rumble is a high-growth video platform and cloud services provider that is creating an independent infrastructure. Rumble’s mission is to restore the internet to its roots by making it free and open once again. For more information, visit: corp.rumble.com.

Contact: press@rumble.com

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not historical facts are forward-looking statements and include, for example, statements regarding our new corporate treasury diversification strategy of allocating a portion of the company’s excess cash reserves to Bitcoin and the acceleration of our expansion into cryptocurrency. Certain of these forward-looking statements can be identified by using words such as “anticipates,” “believes,” “intends,” “estimates,” “targets,” “expects,” “endeavors,” “forecasts,” “well underway,” “could,” “will,” “may,” “future,” “likely,” “on track to deliver,” “on a trajectory,” “continues to,” “looks forward to,” “is primed to,” “plans,” “projects,” “assumes,” “should” or other similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, and our actual results could differ materially from future results expressed or implied in these forward-looking statements. The forward-looking statements included in this release are based on our current beliefs and expectations of our management as of the date of this release. These statements are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include risks inherent with investing in Bitcoin, including Bitcoin’s volatility; the risks of implementing a new treasury diversification strategy; our ability to grow and manage future growth profitably over time, maintain relationships with customers, compete within our industry and retain key employees; the possibility that we may be adversely impacted by economic, business, and/or competitive factors; our limited operating history makes it difficult to evaluate our business and prospects; our recent and rapid growth may not be indicative of future performance; we may not continue to grow or maintain our active user base, and may not be able to achieve or maintain profitability; risks relating to our ability to attract new advertisers, or the potential loss of existing advertisers or the reduction of or failure by existing advertisers to maintain or increase their advertising budgets; Rumble Cloud, our recently launched cloud services business, may not achieve success and, as a result, our business, financial condition and results of operations could be adversely affected; negative media campaigns may adversely impact our financial performance, results of operations, and relationships with our business partners, including content creators and advertisers; spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute, from time to time, to some amount of overstatement of our performance indicators; we collect, store, and process large amounts of user video content and personal information of our users and subscribers and, if our security measures are breached, our sites and applications may be perceived as not being secure, traffic and advertisers may curtail or stop viewing our content or using our services, our business and operating results could be harmed, and we could face governmental investigations and legal claims from users and subscribers; we may fail to comply with applicable privacy laws; we are subject to cybersecurity risks and interruptions or failures in our information technology systems and, notwithstanding our efforts to enhance our protection from such risks, a cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss; we may be found to have infringed on the intellectual property of others, which could expose us to substantial losses or restrict our operations; we may face liability for hosting a variety of tortious or unlawful materials uploaded by third parties, notwithstanding the liability protections of Section 230 of the Communications Decency Act of 1996; we may face negative publicity for removing, or declining to remove, certain content, regardless of whether such content violated any law; paid endorsements by our content creators may expose us to regulatory risk, liability, and compliance costs, and, as a result, may adversely affect our business, financial condition and results of operations; our traffic growth, engagement, and monetization depend upon effective operation within and compatibility with operating systems, networks, devices, web browsers and standards, including mobile operating systems, networks, and standards that we do not control; our business depends on continued and unimpeded access to our content and services on the internet and, if we or those who engage with our content experience disruptions in internet service, or if internet service providers are able to block, degrade or charge for access to our content and services, we could incur additional expenses and the loss of traffic and advertisers; we face significant market competition, and if we are unable to compete effectively with our competitors for traffic and advertising spend, our business and operating results could be harmed; we rely on data from third parties to calculate certain of our performance metrics and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business; changes to our existing content and services could fail to attract traffic and advertisers or fail to generate revenue; we derive the majority of our revenue from advertising and the failure to attract new advertisers, the loss of existing advertisers, or the reduction of or failure by existing advertisers to maintain or increase their advertising budgets would adversely affect our business; we depend on third-party vendors, including internet service providers, advertising networks, and data centers, to provide core services; hosting and delivery costs may increase unexpectedly; we have offered and intend to continue to offer incentives, including economic incentives, to content creators to join our platform, and these arrangements may involve fixed payment obligations that are not contingent on actual revenue or performance metrics generated by the applicable content creator but rather are based on our modeled financial projections for that creator, which if not satisfied may adversely impact our financial performance, results of operations and liquidity; we may be unable to develop or maintain effective internal controls; potential diversion of management’s attention and consumption of resources as a result of acquisitions of other companies and success in integrating and otherwise achieving the benefits of recent and potential acquisitions; we may fail to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows; changes in tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new tax legislation, or exposure to additional tax liabilities may adversely impact our financial results; compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in certain jurisdictions in which we operate, or industry practices may adversely affect our business; and those additional risks, uncertainties and factors described in more detail under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our other filings with the Securities and Exchange Commission. We do not intend, and, except as required by law, we undertake no obligation, to update any of our forward-looking statements after the issuance of this release to reflect any future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Rumble on Social Media

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (investors.rumble.com), press releases, SEC filings and public conference calls and webcasts. We also intend to use certain social media accounts as a means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD: the @rumblevideo X (formerly Twitter) account (x.com/rumblevideo), the @gamingonrumble X (formerly Twitter) account (x.com/gamingonrumble),  the @rumble TRUTH Social account (truthsocial.com/@rumble), the @chrispavlovski X (formerly Twitter) account (x.com/chrispavlovski), and the @chris TRUTH Social account (truthsocial.com/@chris), which Chris Pavlovski, our Chairman and Chief Executive Officer, also uses as a means for personal communications and observations. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.

FAQ

How much money is Rumble (RUM) planning to invest in Bitcoin?

Rumble plans to allocate up to $20 million of its excess cash reserves to Bitcoin purchases.

When will Rumble (RUM) start purchasing Bitcoin?

The timing of Bitcoin purchases will be determined by management based on market conditions, Bitcoin's trading price, and the company's cash needs.

Can Rumble (RUM) modify or cancel its Bitcoin investment strategy?

Yes, the allocation strategy may be suspended, discontinued, or modified at any time for any reason.

Why is Rumble (RUM) investing in Bitcoin?

Rumble is investing in Bitcoin as an inflation hedge and to strengthen its ties with the crypto community while expanding its presence in the cryptocurrency market.