Ripple Labs unveils a $700M share buyback at $175 per share, raising questions about a possible delay in its long-awaited initial public offering.
Ripple Labs has announced a $700 million share buyback program, which values its shares at $175 each.
This strategic decision emphasizes the company’s confidence in its future development trajectory and robust financial position.
Will Ripple’s IPO preparations be postponed as a result of this focus?
In $700M Plan, Ripple Labs Intends To Repurchase Shares At $175 Each
It is important to note that Ripple CEO Brad Garlinghouse notified stakeholders via email that the $700 million tender offer will be open until July 9 and commence on June 10.
The proposal offers eligible shareholders a one-month window to participate, as detailed in investor Jeremy Raper’s X post, which includes a screenshot.
Ripple’s decision is noteworthy because it emphasizes Ripple Labs financial stability and expansion objectives.
As disclosed in the prospectus, the $175 per share offer represents a 135% premium over Ripple’s most recent secondary market price, which was approximately $74-$75 on platforms such as Hyve.
This emphasizes the appealing valuation for the shareholders involved.
The company has also increased the buyback price and quantity compared to its January tender offer, which was $125 per share.
Ripple’s implied valuation is approximately $25 billion, which indicates the company’s substantial development and increased value, as indicated by the $175 per share buyback price.
Additionally, Garlinghouse demonstrated assurance regarding the organization’s trajectory and momentum.
He observed that the transaction was open to holders of eligible vested stock options or shares.
Despite this development, the XRP price continues to decline by a significant 3.5%.
The token’s trading volume has decreased by 7.5%, currently at $2.23.
Will Its Buyback Plan Postpone Ripple’s IPO?
Intriguingly, Ripple’s buyback plan is announced in the context of mounting expectations for an initial public offering (IPO).
According to investors, Ripple’s valuation is expected to reach $35-50 billion if the company were to go public due to its expanding ecosystem and substantial crypto asset reserves.
Ripple had previously declared that an initial public offering (IPO) is not an imminent priority, a stance that was reiterated during the January tender offer.
Garlinghouse proclaimed that it would not pursue an IPO immediately, concentrating on other objectives such as expansions and collaborations.
Ripple’s decision to repurchase shares for the second time in less than a year further indicates that Ripple Labs is internally managing its equity ownership and shareholder expectations rather than opting for a public listing.
Garlinghouse clarified that the firm will only investigate the feasibility of an IPO after the resolution of the XRP litigation. He observed,
I think we want to get certainty and clarity in the United States with the US SEC. You know, I’m hopeful that the SEC will not slow that process down any more than they already have. But you know, we certainly are at a point in scale, where that is a possibility. And we’ll look at that once we’re past this lawsuit with the SEC.