IRVING, Texas - RumbleOn, Inc. (NASDAQ: RMBL), a prominent player in the powersports market, has concluded its $10 million rights offering, as announced today. The offering involved Class B common stock, which saw substantial subscription by shareholders, covering approximately 85% of the available shares at $4.18 each. The expected issue date for these shares is today. According to InvestingPro data, the stock has experienced significant volatility, with a 16% decline over the past week, though maintaining a market capitalization of approximately $197 million.
The rights offering did not reach full subscription, resulting in Stone House Capital Management, LLC stepping in to purchase the remaining shares, amounting to 349,333 shares for roughly $1.5 million. This private placement transaction is scheduled to close on December 19, 2024.
Post the rights offering and subsequent private placement, RumbleOn anticipates a net gain of around $9 million. These funds are earmarked for general corporate purposes, including potentially repaying the company’s convertible senior 6.75% promissory notes due January 1, 2025. The capital also meets certain requirements of a recent amendment to RumbleOn's credit agreement with Oaktree.
Following the completion of these financial activities, RumbleOn expects its outstanding Class B common stock shares to total approximately 37.7 million.
The rights offering was conducted in accordance with RumbleOn’s existing shelf registration statement and the prospectus supplement filed with the SEC on November 26, 2024.
RumbleOn operates through two segments: a Powersports dealership group and Wholesale Express, LLC. The Powersports group is recognized as the largest in the U.S., offering a diverse range of new and pre-owned vehicles, parts, and services. The company also prides itself on being the top buyer of pre-owned powersports vehicles nationwide. Financial metrics from InvestingPro show annual revenue of $1.25 billion, though with a 9.8% year-over-year decline. Subscribers to InvestingPro can access 11 additional key insights and a comprehensive Pro Research Report about RumbleOn's market position and future prospects.
This press release is based on a press release statement and contains forward-looking statements subject to various risks and uncertainties. These include potential impacts on the timing and terms of the rights offering and private placement, as well as RumbleOn's business operations and economic conditions. RumbleOn disclaims any obligation to update any forward-looking statement unless required by law.
In other recent news, RumbleOn, Inc. reported a decrease in Q3 earnings for 2024, with revenue falling by 12.7% to $295 million and adjusted EBITDA declining by 26.1% to $6.8 million. Despite this, the company managed a 53.8% reduction in total inventory and secured a $30 million capital commitment from major shareholders for debt repayment and refinancing. RumbleOn also launched a $10 million equity rights offering, aimed at fulfilling part of the company's additional capital financing requirements.
In a significant development, RumbleOn entered into an exclusive partnership with popular streamer Dr Disrespect, tying the equity deal to performance milestones and including the creation of exclusive content for Rumble's Premium platform. In addition, B. Riley adjusted its stance on RumbleOn, downgrading the stock from Buy to Neutral after the stock experienced a significant rise.
RumbleOn also announced the preliminary results of its recent rights offering, which is expected to yield approximately $9 million in net proceeds. The offering allowed shareholders to purchase additional Class B common stock at $4.18 per share. The funds raised will be used for general corporate purposes, which may include repaying convertible senior promissory notes due in January 2025. These are the recent developments that have shaped RumbleOn's strategic moves and financial health.
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