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 financial remittance giant in 2019.
Ripple remains a significant shareholder of MoneyGram
According to a statement by the US Securities and Exchange Commission 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 included in the mandate. After the sale, Ripple will continue to own at least 3,22 million shares, or 4,44% of MoneyGram.
Even if you include the additional shares of the mandate, which gives Ripple the right to execute a purchase of shares at a predetermined price, the blockchain payment company will still own about 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, earning a significant premium over their price at the time.
Shares of MoneyGram are up over 260% this year, closing at $ 7,42 on Wednesday, which means 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 said. The sale is still ongoing, according to the spokesperson, who did not answer questions about what the company intends to do with the proceeds from the sale.
The collaboration between the two companies continues
Ripple completed the purchase of a $ 50 million equity stake in MoneyGram in November 2019. As early as the end of the third quarter of 2020, Ripple had paid $ 9,3 million to MoneyGram as "market development fees" in MoneyGram's latest financial statements, for the remittance company's use of Ripple's XRP-based settlement network, for the on-demand liquidity 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 firm piloted Ripple's flagship cryptocurrency in 2018.
“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, ”the Ripple spokesperson said.
