Ripple (XRP) buys back shares from investors and values itself at US$15 billion

Despite the ongoing court case with the US Securities and Exchange Commission, Ripple (XRP) is spreading optimism. People have bought back the shares issued in the last round of financing and point to a record year in 2021.

When Ripple (XRP) closed its C funding round in December 2019, the mood was upbeat. The $200 million raised at the time suggested Ripple’s enterprise value at $10 billion. Plans for an initial public offering of Ripple were making the rounds. But a year later, in December 2020, the mood changed. The U.S. Securities and Exchange Commission sued Ripple over XRP for at least 1.3 billion in damages, and the case remains unresolved. At the beginning of 2022, Ripple CEO Brad Garlinghouse now surprises with essential news about the company.

Via Twitter, Garlinghouse announced that the company had bought back the shares sold in the C financing round a good two years ago. A valuation of 15 billion US dollars was the benchmark for Ripple, so investors were paid a premium of 50 percent. According to Garlinghouse, the action was financed from reserves, and Ripple currently has more than $1 billion in its bank account, giving it the strongest financial position in its history. Garlinghouse goes on to write that despite “headwinds,” Ripple delivered its most successful year to date in 2021. In our Ripple (XRP) annual review, you can read about the initiatives that were launched in 2021 and where growth markets are believed to be.

Meanwhile, we can only speculate about the background to the current buyback of company shares. Were the investments in Ripple from the end of 2019 tied to additional conditions that now prompted a reversal? Does Ripple want to distract from the critical legal dispute with the SEC with the unusual action? Did investors insist on their exit to avoid being associated with Ripple and XRP? In any case, Ripple’s reassessed enterprise value of $15 billion is a clear sign that they see themselves on track – or as Garlinghouse puts it, “slowing down is not in our vocabulary.”

Conclusion: Ripple and XRP hope for a positive 2022

The price performance of XRP is further burdened by the process with the SEC, there a ruling is expected in the spring at the earliest. Meanwhile, with the buyback of company shares, Ripple is shifting its focus away from XRP to its innovative technology and services for the financial sector. It’s too early to predict how Ripple and XRP will fare this year. But Garlinghouse is doing what is expected of a CEO, raising hopes for a successful 2022.

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