Ripple’s $285M Share Buyback, $11B Valuation
Ripple Labs, the company behind the XRP token, is reportedly implementing an alternative exit strategy for its early investors. According to sources cited by Reuters on Wednesday, the company is set to conduct a share buyback, intending to repurchase $285 million worth of shares from its early investors and employees. This tender offer is expected to value Ripple Labs at $11.3 billion, with investors having the option to sell up to 6% of their stake in the company.
Ripple’s Share Buybacks Amid Regulatory Uncertainty
On January 10, cryptocurrency firm Ripple Labs, renowned for its XRP coins, is set to repurchase $285 million worth of shares from early investors and employees, according to sources familiar with the matter. This strategic move, known as a tender offer, places the company’s valuation at $11.3 billion. Notably, investors are limited to selling a maximum of 6% of their stake, as reported by anonymous sources. Ripple Labs has officially confirmed the tender offer and expressed its intention to allocate $500 million for the buyback, covering expenses related to converting restricted stock units into shares and addressing tax considerations.
CEO Brad Garlinghouse, citing regulatory uncertainties, clarifies that the company has no immediate intentions of going public in the United States.
The announcement follows Ripple’s recent legal victory against the U.S. Securities and Exchange Commission (SEC), where a judge determined that XRP sales on public exchanges were not unregistered securities offerings.
With a robust financial position, Ripple discloses holding over $1 billion in cash and more than $25 billion in crypto, predominantly in XRP coins. Despite challenges amid the SEC lawsuit, Garlinghouse remains optimistic, emphasizing the company’s international customer base, with 95% comprising non-U.S. financial institutions.
Ripple Labs’ strategic decision to conduct regular share buybacks provides a clear signal of the company’s commitment to enhancing investor liquidity amid a complex regulatory landscape. The choice to refrain from an immediate public offering in the U.S., as highlighted by CEO Brad Garlinghouse, underscores the cautious approach to navigating regulatory uncertainties. Ripple’s recent legal success against the SEC adds a positive note to its trajectory, and with a robust financial position, holding significant assets in both cash and crypto, the company appears well-positioned for future growth. As Ripple continues to expand globally, its acquisition of Metaco and steadfast focus on international markets position it as a key player in the evolving cryptocurrency ecosystem.