Ripple to Sell One-Third of Its Stake in MoneyGram: Here’s What You Need to Know

Ripple to Sell One-Third of Its Stake in MoneyGram: Here’s What You Need to Know

Ripple, the blockchain-based payment technology company, is reportedly set to sell one-third of its stake in MoneyGram International, a surprising move following its investment in the money transfer giant just last year. Despite this sale, Ripple will retain a significant stake, maintaining its influence over the partnership.

Details of the Sale

According to a recent filing with the U.S. Securities and Exchange Commission (SEC), Ripple has authorized a financial institution to sell up to 4 million shares of MoneyGram on its behalf by March 31, 2020.

Ripple’s Stake in MoneyGram Before the Sale:

• Ripple holds 2.3 million shares directly.
• Ripple has a warrant to purchase an additional 5.9 million shares, bringing its total stake to approximately 8.2 million shares.

After the Sale:

• Ripple will sell 33% of its holdings (including warrant shares).
• It will retain about 67% of its stake, equating to approximately 4.2 million shares.

Why is Ripple Selling Its Stake?

The decision to sell a portion of its stake in MoneyGram comes amid a sharp increase in MoneyGram’s stock price since Ripple’s investment in 2019.

Performance of MoneyGram’s Stock:

• In June 2019, Ripple purchased MoneyGram shares at $4.10 apiece.
• As of now, MoneyGram’s shares are trading at approximately $7.45, representing a significant appreciation.

Ripple’s move to sell shares at a profit may be a strategic decision to capitalize on this growth while maintaining a substantial stake in the company.

The Ripple-MoneyGram Partnership

Ripple’s initial investment in MoneyGram in 2019 marked a significant collaboration between a blockchain payment company and a traditional money transfer service.

Key Highlights of the Partnership:

1. Cross-Border Payment Innovations:
   MoneyGram integrated Ripple’s On-Demand Liquidity (ODL) solution to facilitate cross-border payments using XRP, Ripple’s native cryptocurrency.

2. Improved Efficiency:
   Ripple’s technology helped MoneyGram reduce operational costs and improve transaction speed.

3. Mutual Benefits:
   The partnership allowed Ripple to showcase its technology in real-world use cases, while MoneyGram gained a competitive edge in the remittance market.

What Does This Mean for Ripple and MoneyGram?

Ripple’s Perspective:

Despite selling part of its stake, Ripple retains a controlling interest in MoneyGram, ensuring the continuation of their strategic partnership. The sale could also provide Ripple with additional liquidity to invest in other ventures or scale its operations.

MoneyGram’s Perspective:

With Ripple maintaining a majority stake, MoneyGram is unlikely to experience significant operational changes. The partnership continues to be an essential part of MoneyGram’s efforts to modernize its payment systems.

Ripple’s Strategic Move Amid Market Growth

Ripple’s decision to sell comes at a time when the cryptocurrency and blockchain markets are experiencing unprecedented growth. The sale may signal Ripple’s intention to diversify its portfolio or allocate resources to expand its influence in other areas of the blockchain ecosystem.

Conclusion

Ripple’s move to sell one-third of its stake in MoneyGram is a strategic decision to capitalize on the significant appreciation of MoneyGram’s stock while retaining a controlling interest. This ensures the continuation of their mutually beneficial partnership, even as Ripple reallocates resources to other ventures.

The development highlights Ripple’s agility in responding to market dynamics and its commitment to sustaining innovative solutions in the financial sector.

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