Blockchain payments giant Ripple is cashing out a third of its total stake in remittance provider MoneyGram for the first time after the investment last year.
As revealed in a recent U.S. Securities Exchange and Commission filing, Ripple currently holds 6.22 million shares of MoneyGram along with a warrant, which allows the blockchain startup to purchase another 5.95 million shares. Adding all this up, Ripple is holding a total of 12.2 million shares, which is 17 percent of MoneyGram’s outstanding shares.
Ripple is now selling up to 4 million shares from its MoneyGram holdings. This constitutes roughly 33 percent of its total holdings in the remittance company.
The San Fransisco-headquartered company has authorized an unnamed third-party to conduct the sale on behalf of it by March 31, 2021.
“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,” a Ripple spokesperson told the press.
A Profitable Exit
Ripple bought stakes in MoneyGram last year, promising a total $50 million investment in the company.
MoneyGram additionally agreed to use XRP in the foreign exchange settlements for cross-border payments. The remittance company is using Ripple’s on-demand liquidity (ODL) network for settlements across Europe, Australia, and the Philippines since June 2019.
During the initial investment, Ripple paid a 183 percent premium price of $4.10 for each MoneyGram share. But the company is still exiting from a part of its investment in profits: MoneyGram stocks are publicly trading above $7.4, as of press time.
“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,” the spokesperson added. “In just over a year, we’ve made incredible progress and look forward to continuing to work alongside MoneyGram to transform cross-border payments.”
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