Two Tether-related entities, German former crypto miner Northern Data and US-based video streaming service Rumble, are set to begin the merger process, with Rumble offering equity for shares of Northern Data.
The merger, which was announced in November of last year, will end with Rumble taking over data center sites and receiving thousands of GPU servers. Tether owns a majority of Northern Data and 30% of Rumble.
Shareholders in Northern Data will receive 2.0281 shares of Rumble stock for each share they hold. Northern Data is currently trading at $13 a share and Rumble is trading at $6.41 a share.
A strange merger that’s good for Tether
From an outside perspective, a defunct mining company and a video streaming service merging doesn’t make a lot of sense. However, in November Christ Pavlovski, the CEO of Rumble, said, “Northern Data. Tether. Rumble. This is how we build the AI ecosystem for the future, from the ground up.”
It’s unclear what Tether or Rumble have to do with AI.
What’s more clear is that the merger will ultimately benefit Tether, which has already committed to purchasing $150 million in compute from Rumble over the next two years and will have a $610 million unsecured debt financing facility provided to Northern Data now reassessed and altered.
Financial Shenanigans
The merger of the two Tether-related companies required little agreement from minority shareholders due to Tether’s strong influence, Rumble’s executive equity structure, and Northern Data’s financial struggles over the past several years.
Both Northern Data and Rumble have seen the price of their stocks slide post-Tether investment, with Rumble trading near all-time lows as of recent.
Since the merger has begun the stock has rallied 20%.
The financial shenanigans involved in the Tether-related deal is nothing new for the company, which has never been audited, has been hacked, and whose biggest customers were the most infamous scammers in cryptocurrency history.
Read more: Tether-owned Northern Data considers ditching bitcoin mining
Since the collapse of FTX and the election of Donald Trump, Tether has attempted to present itself as transparent and safe, and has made a massive push into the US market. This includes lobbying efforts that saw CEO Paulo Ardoino visit the White House multiple times.
US Secretary of Commerce, Howard Lutnick, used to run Cantor Fitzgerald, which purchased US treasury notes for the company and previously said he was “a big fan of the company.”
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Source: https://protos.com/rumble-begins-merging-with-northern-data/
