IRVING, Texas - RumbleOn, Inc. (NASDAQ: RMBL), a leading powersports retailer with annual revenue of $1.25 billion, has announced the preliminary results of its recent rights offering, which is expected to yield approximately $9 million in net proceeds. The rights offering allowed shareholders to purchase additional Class B common stock at $4.18 per share, with the subscription period ending on December 12, 2024.According to InvestingPro data, RumbleOn's stock has shown strong momentum with notable returns in recent months, though it trades with significant volatility. InvestingPro subscribers have access to 12 additional key insights about RMBL's financial health and market position.
The offering resulted in the subscription of 2,043,011 shares. The unsubscribed shares, totaling 349,333, are anticipated to be acquired by Stone House Capital Management, LLC, a significant shareholder managed by board member Mark Cohen, under a previously arranged agreement. The closing of this backstop private placement is scheduled for December 19, 2024.
RumbleOn has stated that the funds raised will be used for general corporate purposes, which may include repaying convertible senior promissory notes due in January 2025. With a debt-to-equity ratio of 7.67 and a current ratio of 1.12, these funds will also partially fulfill the company's additional capital financing requirements as per a recent amendment to its credit agreement with Oaktree.
The finalization of the rights offering is pending, with the definitive results expected to be filed in a Current Report on Form 8-K around December 17, 2024. After the completion of both the rights offering and the private placement, RumbleOn anticipates having approximately 37,713,298 shares of Class B common stock outstanding.
This press release 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. The rights offering was conducted pursuant to an effective shelf registration statement on Form S-3 and a prospectus supplement filed with the SEC on November 26, 2024.
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 addition, B. Riley adjusted its stance on RumbleOn, downgrading the stock from Buy to Neutral after the stock experienced a significant rise, approximately 70%, since the company reported its third-quarter results and announced the equity rights offering. The firm set a price target of $7.00 for RumbleOn shares.
In other major developments, 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. These are the recent developments that have shaped RumbleOn's strategic moves and financial health.
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