Two Tether-related companies, former German cryptocurrency miner Northern Data and US-based video streaming service Rumble, are set to begin a merger process, with Rumble offering a stake in Northern Data’s stock.
The merger, announced last November, ends with Rumble taking over the data center site and receiving thousands of GPU servers. Tether owns a majority of Northern Data and 30% of Rumble.
Northern Data shareholders will receive 2.0281 Rumble shares for each share they own. Northern Data is currently trading at $13 per share and Rumble is trading at $6.41 per share.
A strange merger that favors Tether
From an outsider’s perspective, a merger between a defunct mining company and a video streaming service doesn’t make much sense. But Rumble CEO Christ Pavlovski said in November, “Northern Data, Tether, Rumble. This is how we’re building the AI ecosystem of the future from the ground up.”
It’s unclear what Tether and Rumble have to do with AI.
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What’s also clear is that this merger will ultimately benefit Tether. Tether has already committed to purchasing $150 million in computing from Rumble over the next two years and will now have a revalued and modified $610 million unsecured debt financing facility provided to Northern Data.
financial fraud
The merger of the two Tether-related companies required little minority shareholder consent due to Tether’s strong influence, Rumble’s management’s capital structure, and Northern Data’s financial struggles over the past few years.
Northern Data and Rumble have both seen their stock prices fall after the Tether investment, with Rumble recently trading near all-time lows.
Since the merger began, the stock price has increased 20%.
Financial fraud involving Tether-related transactions is nothing new for a company that has never been audited, has been hacked, and whose biggest customer was the most notorious fraudster in crypto history.
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Since the collapse of FTX and the election of Donald Trump, Tether has sought to portray itself as transparent and secure, making major inroads into the US market. This includes lobbying efforts that included multiple visits to the White House by CEO Paulo Ardoino.
U.S. Secretary of Commerce Howard Lutnick, who owns Cantor Fitzgerald, which buys U.S. Treasury notes for the company, has previously said he is “a big fan of the company.”
