Ripple cashing out of MoneyGram just one year after investment

Of the 6.22 million shares of MoneyGram that Ripple owns, it's now selling up to 4 million of its stakes.

By · Nov 28, 2020 . 5min read

Ripple cashing out of MoneyGram news

From a recent US Securities and Exchange Commission filings, cryptocurrency payment startup Ripple is looking to sell some of its stakes in MoneyGram after about one year it invested in the remittance giant.

Of the 6.22 million shares of MoneyGram Ripple it owns, it’s now selling up to 4 million of its stakes. Ripple’s original stake constitutes 8.6% of shares outstanding. The cryptocurrency payment firm also has an additional warrant to buy up to another 5.95 million shares. For this, it will have a total equity position of 12.2 million shares, or 17% of MoneyGram’s shares outstanding.

As it sells up to 4 million shares, that will amount to approximately 33.3% of its entire stake. This is considering the shares represented by the warrant. After-sales however, Ripple will still own 11% of MoneyGram.

Ripple in profit as it sells stakes in MoneyGram

Nevertheless, amidst the volatility in the cryptocurrency space, Ripple is clearly in gains by selling part of its stakes in MoneyGram. In June 2019, MoneyGram announced Ripple’s investment partnership. It purchased stakes in MoneyGram at $4.10 investing up to $50 million in the remittance company. And by November 2020, Ripple had concluded its investment in the remittance firm. As at the time of the SEC filings on Friday, MoneyGram’s share has risen more than 260% this year. For instance, its closing price as on Wednesday this week was $7.42.

“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,”

Ripple’s spokesperson

From what looks like a subsidy, the cryptocurrency company by the end of Q3, 2020 had paid MoneyGram up to $9.3 million. It called this “market development fees” for MoneyGram’s use of Ripplenet’s ODL for providing liquidity.

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