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Blockchain payments firm Ripple is selling about a third of its stake in MoneyGram, in its first sale of company stock since the startup invested in the remittance giant in 2019.
According to a US Securities and Exchange Commission filing on Friday, Ripple owns 6.22 million shares of MoneyGram, or 8.6% of the outstanding shares, plus a mandate to buy up to another 5.95 million shares. , for a total equity position of 12.2 million shares, or 17% of MoneyGram’s outstanding shares.
Ripple now sells up to 4 million shares, or about 33.3% of the entire holding, if you count the shares represented by the warrant. After the sale, Ripple will continue to own at least 3.22 million shares, or 4.44% of MoneyGram. When you include the additional shares represented by the warrant, which gives Ripple the right to execute a purchase of shares at a predetermined price, the blockchain payment company will still hold approximately 11% of MoneyGram.
Under the terms of Ripple’s initial investment announcement in June 2019, the company bought the shares of MoneyGram for $ 4.10 each, at a significant premium over their price at the time. Shares of MoneyGram are up more than 260% this year, closing at $ 7.42 on Wednesday, meaning Ripple is making a significant profit on its investment.
“Ripple is a proud partner in MoneyGram’s digital growth transformation. This is purely a judicious financial decision to make some gains on Ripple’s MGI [MoneyGram International] investment and is in no way a reflection of the current state of our partnership, “a Ripple spokesperson told CoinDesk.
Sales are still ongoing, according to the spokesperson, who did not respond to a question sent by email asking what the company intends to do with the proceeds from the sale of shares.
Ripple completed the purchase of a $ 50 million equity stake in MoneyGram in November 2019.
As late as the end of the third quarter of 2020, Ripple had paid $ 9.3 million to MoneyGram, referred to as “market development fees” in MoneyGram’s latest financial statement, for use by the remittance company. Ripple’s XRP-based settlement network, the Liquidity On-Demand (ODL) network (formerly known as xRapid).
MoneyGram has been using this cross-border solution to conduct transactions in Europe, Australia and the Philippines since June 2019, for which Ripple has paid MoneyGram at least $ 52 million. The remittance company piloted Ripple’s flagship cryptocurrency in 2018.
“We will remain a significant shareholder of MoneyGram after the sale – they are clearly a leader in the global payments space in over 200 countries and territories. In just over a year, we have made incredible progress and look forward to continuing to work together with MoneyGram to transform cross-border payments, ”the Ripple spokesperson said.
