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- Ripple will sell about a third of its shares in MoneyGram.
- The partnership with MoneyGram must continue without restrictions.
Ripple Labs is selling about a third of its stake in remittance giant MoneyGram, according to a document released Friday by the US Securities and Exchange Commission (SEC). According to the form, on November 25 Ripple Labs entered into an agreement with MoneyGram under which it has the right to sell up to 4,000,000 common shares. This option will expire “no earlier than March 31, 2021, by which time the maximum amount has been sold or upon the occurrence of some other customary events affecting the issuer”.
As reported by CNF, Ripple completed its $ 50 million investment in MoneyGram last November. Ripple acquired the newly issued MoneyGram shares at a price of $ 4.10 per share, a significant premium over MoneyGram’s previous market price.
After the investment, Ripple owned 9.95% of MoneyGram’s common stock and approximately 15% on a fully diluted basis, including the non-voting warrants held by Ripple. The investment was intended to support MoneyGram’s business operations through the use of Ripple’s on-demand liquidity.
Ripple plans to sell a third of its MoneyGram stock
As also revealed in the SEC document, Ripple owns approximately 6.23 million common stock and has exclusive voting and investment rights over those shares. Additionally, Ripple holds warrants on 5.95 million common stock, which represents a total equity position of 12.2 million shares or 17% of MoneyGram’s outstanding shares.
Taking these data into account, Ripple is now considering the sale of a third of the entire holding, if the shares represented by the warrant are included. After the sale, Ripple will own at least 3.22 million shares or 4.44% of MoneyGram. If the warrant is included, Ripple can still hold up to approximately 11% of MoneyGram if it buys additional shares.
As a Ripple spokesperson explained to CoinDesk, the decision is purely financial. At a current share price of USD 7.42 per share, Ripple made an 80% gain.
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.
Furthermore, the Ripple spokesperson also said the sales are still ongoing. Ripple also confirmed that it will continue its partnership with MoneyGram:
We will remain a significant shareholder of MoneyGram after the sale – it is 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.
Surprisingly, over the past year, Ripple has consistently made large payments to MoneyGram. As late as the third quarter, the San Francisco-based company paid MoneyGram $ 9.3 million as “market development fees” for on-demand liquidity (ODL). In the previous quarter, Ripple even paid $ 15.1 million. The company has made these payments since the start of the agreement with MoneyGram to promote the adoption of XRP and On-Demand Liquidity.
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