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Ripple Labs Inc. is selling 4 million of its shares in Moneygram, or about a third of its total stake in the company.
The decision appears to be partly motivated by the increase in the price of the Moneygram stock and Ripple’s desire to cash out after buying the stock with a $ 4.10 premium in 2019.
As of the close on November 27, Moneygram’s stock was down 4.8% to $ 7.42 on the Nasdaq Stock Exchange. However, the stock was up 260% year to date, rising from $ 2.06 on January 2.
Ripple will make nearly $ 30 million if it sells its 4 million Moneygram shares at current market prices – a gain of nearly 50%. However, the sale is still ongoing.
A Ripple spokesperson was quoted by industry publications as saying, “This is just a judicious financial decision to make some gains on Ripple’s Moneygram International investment …” The spokesperson added that the sale “is in no way a reflection of the current state of our partnership. “
According to a November 27 filing from the US Securities and Exchange Commission, Ripple owns an 8.6% equity stake in global remittance giant Moneygram. It is the equivalent of 6.24 million shares.
Ripple, the issuer of the eponymous cryptocurrency XRP, has the option to purchase an additional 5.96 million shares with a mandate. If exercised, this option would bring Ripple’s total stake to 12.2 million shares or approximately 17% of Moneygram’s outstanding shares.
Ripple has now put the 4 million shares up for sale. The shares represent approximately one third of its entire holding in Moneygram when warrant shares are included. Excluding those, Ripple will continue to own 2.24 million shares or 3.1% of Moneygram’s outstanding shares. Counting the additional warrant shares, this would rise to 11%.
“We will remain a significant shareholder in Moneygram after the sale,” the Ripple spokesperson said, adding that “in just over a year, we have made incredible progress and look forward to continuing to work together with Moneygram to transform payments. cross-border. “
Ripple completed a $ 50 million investment in Moneygram in November 2019, in what was touted by the two entities as a strategic partnership. At a premium price of $ 4.10 per share at the time of purchase, the $ 50 million investment adds up to exactly 12.2 million shares – the total number of shares Ripple holds in Moneygram, including shares. additional with warrants.
Moneygram uses Ripple’s XRP-based settlement network, the On-Demand Liquidity Network (ODL), to facilitate remittances in Australia, Europe and the Philippines.
What do you think of Ripple selling its Moneygram stake? Share your thoughts in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
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