Ripple Plans to Sell 4 million MoneyGram shares
Ripple has filed with the US Securities and Exchange Commission (SEC) to liquidate four million MGI shares, a year after acquiring the money transfer firm. MoneyGram uses XRP and the On-Demand Liquidity (ODL) in select corridors for cross-border fund transfer. It has also been receiving millions from Ripple as market development fees from as early as Q1 2020.
Ripple bought MGI shares at a time when the money transfer company was struggling and on the brink of bankruptcy. At $4.2 a share, Ripple bought its shares at a premium. By pumping $50 million, they own 6.22 million shares. However, there is a warrant that could see Ripple buy an additional 5.95 million shares pushing their overall stake at the company to 17 percent of MoneyGram’s outstanding shares. MGI’s shares are currently trading at $7.42.
Impact on the XRP Price:
Neutral. MoneyGram uses ODL and XRP. Their participation supports the price of XRP in the open market, a bullish development. There are no reasons given by Ripple explaining their decision to cash out. MoneyGram is now back on its feet. As such users can transfer money easily and cheaply using Ripple’s rails pointing out the benefits of the XRPL and XRP.
More market updates on our Blog