RumbleOn launches $10 million rights offering

IRVING, Texas - RumbleOn, Inc. (NASDAQ: RMBL), a powersports marketplace and transportation services provider, has initiated a $10 million equity rights offering, with proceeds intended for general corporate purposes, including potential repayment of its 6.75% convertible senior promissory notes due January 1, 2025. This move also aims to fulfill part of the company's additional capital financing requirements following a recent amendment to its credit agreement with Oaktree.

Eligible shareholders of RumbleOn's Class A and Class B common stock as of November 25, 2024, will receive non-transferable subscription rights to purchase Class B common stock at $4.18 per share. The rights offering includes the issuance of up to 2,392,344 shares, with each shareholder entitled to one subscription right for each share owned on the record date. These rights will expire on December 12, 2024, unless extended by the company.

In conjunction with the offering, RumbleOn has entered into agreements with certain board members and stockholders, including Stone House Capital Management, LLC, to ensure the purchase of any unsubscribed shares at the same price offered to eligible stockholders.

The subscription rights will not be traded on any stock exchange, but the Class B common stock acquired through the rights exercise will continue to be listed on the Nasdaq Capital Market under the ticker "RMBL." Subscription documents are expected to be distributed to eligible shareholders starting today. Interested parties holding shares through brokers or other nominees should inquire with them regarding participation details.

RumbleOn has refrained from making recommendations to shareholders regarding the rights offering, advising them to independently assess the company's prospects before participating. The offering is being made pursuant to a shelf registration statement filed with the SEC and a prospectus supplement.

The company, known for its Powersports dealership group and transportation services via Wholesale Express, LLC, emphasizes that this press release contains forward-looking statements and that actual events or results may differ materially from those anticipated. This announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.

In other recent news, RumbleOn Inc. has reported a decrease in its Q3 earnings for 2024. The company's revenue fell by 12.7% to $295 million and adjusted EBITDA saw a decline of 26.1% to $6.8 million. Despite these reductions, RumbleOn achieved a 53.8% reduction in total inventory and secured a $30 million capital commitment from major shareholders for debt repayment and refinancing.

In other significant developments, Rumble has entered into an exclusive partnership with popular streamer Dr Disrespect. This equity deal is tied to performance milestones and includes the creation of exclusive content for Rumble's Premium platform. Dr Disrespect will also assume a leadership role within Rumble Gaming, contributing to community development.

These recent developments highlight Rumble's strategic moves to boost its content offerings and manage its financial health. The company continues to navigate its strategic goals and operational efficiency amidst a challenging market environment.

InvestingPro Insights

As RumbleOn (NASDAQ: RMBL) embarks on its $10 million equity rights offering, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at $220.36 million, reflecting its current position in the powersports marketplace.

InvestingPro data reveals that RumbleOn's revenue for the last twelve months as of Q3 2024 was $1.25 billion, with a revenue growth of -9.8% over the same period. This aligns with an InvestingPro Tip indicating that analysts anticipate a sales decline in the current year. The company's gross profit margin of 25.42% suggests a reasonable ability to cover operating costs, although its operating income margin is slim at 0.62%.

Another InvestingPro Tip notes that the stock generally trades with high price volatility, which is evident in its recent price movements. While the stock has seen a strong return of 16.16% over the last three months, its year-to-date performance shows a decline of 30.22%. This volatility could be a factor for investors considering participation in the rights offering.

It's worth noting that RumbleOn is currently not profitable, with a negative P/E ratio and a basic EPS of -$5.99 for the last twelve months. This information, combined with the InvestingPro Tip that analysts do not anticipate the company will be profitable this year, provides context for the company's decision to raise additional capital through the rights offering.

For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for RumbleOn, which could provide valuable insights for decision-making regarding the rights offering and overall investment strategy.

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