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Ripple will sell up to 4 million shares of MoneyGram ($ MGI) by March 31, 2020. Ripple’s intention to sell 33% of its stake in its strategic partner MoneyGram was revealed via a SEC filing on November 27.
A Ripple spokesperson said,
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 in no way reflects the current state of our partnership.
Ripple currently owns 6,237,523 shares of $ MGI, approximately 8.6% of MoneyGram’s outstanding shares. In June 2019, Ripple bought its MoneyGram stock for $ 4.10 each; today, MoneyGram’s stock is trading at $ 7.02 at press time, which means Ripple has an unrealized gain of 72% on their $ MGI investment so far.
Ripple’s SEC filing states that Ripple has a mandate to purchase 5,957,600 additional shares, which the company could execute to increase its holding MoneyGram and become the owner of approximately 17% of MoneyGram’s outstanding shares.
“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,” the Ripple spokesperson said. “In just over a year, we’ve made incredible progress and look forward to continuing to partner with MoneyGram to transform cross-border payments.”
Ripple’s Strange Collaboration
Ripple and MoneyGram collaborated in June 2019; in the strategic partnership, Ripple (XRP) pay MoneyGram to provide liquidity to its ODL network. However, public statements from MoneyGram indicate that the international money transfer company is not very interested in Ripple’s XRP; “We [MoneyGram] we sell XRP as soon as we get it, ”a MoneyGram spokesperson said.
The strategic partnership will expire in July 2023. It will be interesting to see if the two companies decide to extend the partnership or terminate the relationship when it expires.
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