Blockchain payments giant Ripple has had its ties with global remittance giant MoneyGram since the $30 million investment in the company’s equity and a commercial agreement for cross-border settlement using digital assets early in 2019. This followed another $20 million investment, raising Ripple’s stake in Moneygram to 9.95%.
Now, recent reports have revealed that Ripple is set to sell approximately one-third of its stake in MoneyGram, as a part of the first sale of such nature since the company’s investment in the remittance giant.
A recent filing at the U.S. Securities and Exchange Commission states that Ripple currently owns 6.22 million shares of MoneyGram, or 8.6% of shares outstanding, along with a warrant to buy up to another 5.95 million shares, for a total equity position of 12.2 million shares, or 17% of MoneyGram’s shares outstanding.
Ripple has also obtained warrants which give it the right to increase its stake to 15% in the future, a filing with the U.S Securities and Exchange Commission confirmed. This completed the acquisition of a $50 million stake in Moneygram as a part of the original commitment.
The company will now sell up to 4 million of these shares, which makes is 33.3% of its entire stake, if we consider the shares represented by the warrant as well. Following the sale, Ripple will still be in control of at least 3.22 million shares, or a 4.44% stake in MoneyGram.
Considering the warrant, which gives Ripple the right to purchase stocks at a predetermined price, the blockchain payments firm will still own about 11% of MoneyGram.
Ripple makes good money
At the time of purchase, the shares in MoneyGram were priced at $4.10 apiece. The price is now up more than 260% in 2020, closing at $7.42 on Wednesday, which nets Ripple a hefty profit for its investment. As of now, the sale is still underway, according to a Ripple spokesperson, who added:
“Ripple is a proud partner in MoneyGram’s digital growth transformation. This is purely a judicious financial decision to realize some gains on Ripple’s MGI [MoneyGram International] investment and is in no way a reflection of the current state of our partnership.”
MoneyGram has been using Ripple’s ODL in its daily operations via RippleNet across several jurisdictions. All things considered, both the companies seem to be benefiting from the partnership, and every new expansion presents new opportunities for Ripple and XRP. However, this sale doesn’t mark the end of this partnership.
“We will remain a significant shareholder in MoneyGram following the sale – they are clearly a leader in the global payments space in over 200 countries and territories. In just over a year, we’ve made incredible progress and look forward to continuing to work alongside MoneyGram to transform cross-border payments,” the Ripple spokesperson said.