Ripple Working on $285M Share Buyback at $11.3B Valuation

Cryptocurrency firm Ripple Labs, renowned for the XRP token, is set to repurchase $285 million worth of company shares from early investors and employees, according to two undisclosed sources familiar with the matter, as reported by Reuters.

The tender offer, which values Ripple at $11.3 billion, allows investors to sell up to 6% of their stake in the privately-held company. Furthermore, Ripple has confirmed the tender offer and stated its intention to allocate $500 million for the buyback, covering the expenses related to converting restricted stock units into shares and addressing tax obligations.

Brad Garlinghouse, Ripple’s CEO, expressed the company’s plan to conduct regular share buybacks to enhance liquidity for investors. He also clarified that Ripple currently has no immediate intentions of going public in the United States, citing regulatory uncertainties.

Garlinghouse revealed that Ripple holds over $1 billion in cash and possesses a crypto portfolio exceeding $25 billion, predominantly consisting of XRP tokens.

This move follows Ripple’s recent legal victory against the US Securities and Exchange Commission (SEC), where a US District Judge also determined that XRP sales on public exchanges did not constitute unregistered securities offerings.

Established in 2012, Ripple focuses on developing a payment system that facilitates cross-border transactions and advocates for the use of XRP. In May of the last year, Ripple acquired Swiss crypto custody firm Metaco for $250 million.

Despite navigating challenges during the SEC lawsuit, Garlinghouse emphasized the company’s growth, with 95% of its customers being non-US financial institutions. The exact size of Ripple’s payment business remains undisclosed.

XRP Price Action

Ripple’s native cryptocurrency, XRP, has experienced a recent downward trend, currently trading at $0.57 with a market cap of $31.06 billion, reflecting a 3% increase at press time.

In a recent update, crypto analyst Ali Martinez drew attention to the weighted market sentiment of XRP, noting that it has reached its lowest negative point since mid-May 2023.

For contrarian XRP investors who follow a strategy of going against prevailing sentiment, Martinez suggests that this development could present an intriguing opportunity. However, investors are advised to consider multiple factors and conduct thorough analyses before making any financial decisions based on sentiment indicators.

According to Ali Martinez, the prevailing pattern influencing XRP’s price movements since June 2022 appears to be an ascending parallel channel.

If this trend continues, there is a potential for XRP to move towards the middle or upper boundaries of the channel, currently positioned at $0.80 and $1.10, respectively.