Ripple Labs Inc. will sell its 4 million shares in Moneygram, or about one-third of its total shares.
The decision appears to be partly due to the soaring Moneygram stock price and Ripple’s desire to cash out after buying shares at a premium of $4.10 in 2019.
At the close of November 27, Moneygram’s stock fell 4.8% to $7.42 on the Nasdaq Stock Exchange. However, the stock has soared 260% so far this year, up from $2.06 on January 2.
If it sells its 4 million shares of Moneygram at the current market price, Ripple will receive nearly $30 million in income, an increase of nearly 50%. However, the sale is still in progress.
Industry publications quoted Ripple’s spokesperson as saying: “This is purely a wise financial decision to realize certain gains from Ripple’s Moneygram International investment…” The spokesperson added that the sale “in no way reflects our partners The current state of the relationship…”
According to a document filed by the US Securities and Exchange Commission on November 27, Ripple owns 8.6% of the global money transfer behemoth Moneygram. Equivalent to 6.24 million shares.
Ripple, the issuer of the XRP cryptocurrency of the same name, can choose to purchase 5.96 million shares with warrants. If the option is exercised, Ripple’s total holdings will reach 12.2 million shares, representing approximately 17% of Moneygram’s issued shares.
Ripple has now issued 4 million shares. When included in the warrant shares, these shares account for approximately one-third of all its shares in Moneygram. In addition to these shares, Ripple will still own 2.24 million shares or 3.1% of Moneygram’s outstanding shares. If included in the additional warrant shares, it will increase 11% of the shares.
A Ripple spokesperson said: “After the sale, we will continue to be an important shareholder of Moneygram and added, “In just over a year, we have made incredible progress and look forward to continuing to work with Moneygram. To change cross-border payments. “
Ripple completed its $50 million investment in Moneygram in November 2019, which the two entities call a strategic partnership. At a premium of $4.10 per share at the time of purchase, this $50 million investment totals 12.2 million shares, which is the total number of shares held by Ripple in Moneygram, including additional warrants.
Moneygram uses Ripple’s XRP-based settlement network, the On-Demand Liquidity (ODL) network, to facilitate remittances to Australia, Europe, and the Philippines.
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