- Ripple has abandoned its IPO plans and is currently in the process of buying back $285 million worth of private shares.
- Ripple CEO Brad Garlinghouse reveals Ripple's plan to regularly buy back shares to provide liquidity to investors.
- On its balance sheet, the company holds over $1 billion worth of cash and $25 billion worth of cryptocurrencies, most of which is XRP.
According to a recent Reuters report, Ripple, one of the largest payment transfer companies, has abandoned its plans to go public in the US. As the difficult legal battle with the US Securities and Exchange Commission (SEC) comes to an end, Ripple plans to buy back shares. This increases investors' liquidity and offers them the opportunity to sell their shares to the giant.
Ripple is a privately funded company. Five rounds of financing were completed, including two angel financing rounds, one seed financing round, one Series A round, one Series B round and one Series C round. The proposed buyback would therefore involve a buyback from the original lenders via a tender offer.
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Ripple Labs is buying back $285 million in shares
According to a recent Reuters report, Ripple could soon be worth over $11 billion if the payments company successfully completes a planned $285 million buyback of its original shares. Reuters reported that two sources familiar with the matter informed the news company that the share buyback and tender offer would theoretically increase Ripple's valuation to $11.3 billion.
Sources who requested anonymity told Reuters that share sales by investors were capped at 6%. The company has confirmed the offer and plans to spend an additional $500 million to cover the cost of converting restricted stock units into shares. Restricted stock units (RSUs) are often offered to employees as part of their compensation.
Ripple CEO Brad Garlinghouse said the company expects to regularly conduct more stock buybacks and provide liquidity to investors rather than going public sooner. According to Garlinghouse, regulatory uncertainty in the US is a key factor in Ripple's decision not to go public.
Ripple’s partial victory against the SEC, which determined that XRP is not an “investment contract,” is one of the factors that led Ripple to buy back its shares.
XRP is trading at $0.5951 on Binance at the time of writing and the altcoin is down 1.2% on the day.
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