Ripple Profits From 2019 MoneyGram Investment

  • Ripple’s 2019 investment in MoneyGram seems to be paying off, with the firm netting $15.3 million from selling 2.2 million of its shares in the remittance firm.
  • While the developer of XRP is planning to sell a total of 4 million MoneyGram shares, that only represents one third of its stake.
MoneyGram logo on their main exchange office in Belgrade, Serbia

MoneyGram logo on their main exchange office in Belgrade, Serbia on 11 July 2018. Shutterstock

The firm behind the XRP digital asset, Ripple, is profiting on its 2019 investment into MoneyGram, by selling a part of its shares for a gain on its initial investment.

According to a filing with the U.S. Securities and Exhcnage Commission (SEC) from Friday, Ripple Labs was able to sell around 2.2 million shares of its MoneyGram (MGI) stock between 27 November and 4 December. While the sale netted the company $15.3 million, it represents only half of what the firm is planning to sell, according to another filing with the SEC.

Last week, Ripple revealed that it is planning to sell up to 4 million shares of its MoneyGram stock by 31 March, 2021, which represents about one third of its stake in the remittance firm. Once the entire sell has been completed, Ripple will still own 2.3 million shares of MoneyGram and a warrant that gives it the right to buy additional 5.9 million shares at a fixed price, bringing the total to 8.2 million shares remaining.

Ripple first announced its investment into MoneyGram back in June, 2019, when the firm agreed to buy $30 million MoneyGram shares at a fixed price of $4.10 per stock; at the time that was more than three times the normal price. Even though the purchase was made at a premium, the deal seems to be paying off, as the value of MoneyGram’s stock has rocketed in the past few months. A Ripple spokesperson said:

“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 investment and is in no way a reflection of the current state of our partnership.”

Back in October the price of the shares was around $2.94, but quickly soared to $8.53 by 23 November. Since the initial filing, the price of MoneyGram’s stock has taken a plummet, and is now resting around the $6.5 mark.

Discussion
Related Coverage
Judge Rules XRP Sale on Exchanges Not a Security
  • A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
  • The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
July 13, 2023, 6:11 PM
ripple

Shutterstock

Court Denies SEC’s Request to Seal Hinman Speech Documents in Ripple Lawsuit
  • These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
  • The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
Coinbase Files for Amicus Brief in Support of Ripple
  • The exchange argues that the SEC failed to provide a “fair notice” that selling XRP was illegal, and that it previously made public statements that those transactions were lawful.
  • Coinbase also pointed out that the SEC is yet to provide clear guidance to crypto businesses, and that it keeps being inconsistent about its enforcement approach.