Blockchain payments company Ripple is about taking out 33% of its stake in US-based money transfer firm Moneygram, which will earn the firm a huge profit. This is coming after the MoneyGram stock increased recently.
The blockchain started invested in the payments transfer company only last year when the company undertook its first sale of stock and shares.
Ripple making a significant profit
Yesterday, Ripple submitted a filing to the U.S. Securities and Exchange Commission (SEC) intending to sell its stake in the MoneyGram. Ripple initially bought 8.6% of the MoneyGram shares, which is about 6.22 million shares. Subsequently, the Blockchain firm had a warrant to buy an additional 5.95 million shares, taking the total number of shares to 12.2 million or 17% of the entire MoneyGram’s shares.
Now, Ripple wants to sell 33.3% of those shares (4 million shares). When the warrant shares are included, Ripple will still own 11% of the entire MoneyGram shares.
When the company bought the shares last year, the unit price was $4.10, based on the initial investment announced by the company.
But since last year, the shares have risen significantly by over 260% this year, as it closed at $7.42 on Thursday. This means that the Blockchain firm will be making a significantly high profit when it cashes out the said shares.
A Ripple spokesperson commented about the company’s decision and the continued business alliance with MoneyGram.
“Ripple is a proud partner in MoneyGram’s digital growth transformation,” he said.
The spokesperson also revealed that the decision was carefully thought to be best for Ripple and its investors. He also reiterated that the company’s decision to sell some of its shares is taken because of the realized gains from MoneyGram’s shares growth.
According to the spokesperson, the process of selling the shares is still ongoing. But he did not reply when asked about the intention of the company regarding the proceeds from the sale.
A strong partnership between both firms
The partnership between Ripple and MoneyGram has enabled both firms to grow in their respective industries.
Before the third quarter of this year, Ripple has already paid $9.3 million to MoneyGram for “market development fees”. According to Moneygram, the payment is for the use of Ripple’XRP-based network ODL, previously called xRapid.
The remittance firm has utilized the cross-border solution to carry out transactions in the Philippines, Australia, as well as Europe since last year. In 2018, Moneygram piloted Ripple’s maiden crypto coin.
