Skip to content
- VivoPower to buy $100M in privately held Ripple shares.
- First US-listed company to hold both Ripple shares and XRP tokens.
- Strategy aims to lower XRP acquisition cost and boost shareholder value.
VivoPower International PLC announced a major move into the digital asset space. The Nasdaq-listed company will acquire privately held XRP shares worth $100 million. This follows a two-month review of Ripple’s operations and financials.
The deals will directly be struck with existing shareholders of Ripple, subject to approval from Ripple’s management. Concurrently with this transaction, VivoPower will continue purchasing and holding XRP tokens. Ripple first created 100 billion XRP, and around 14 million have been irreversibly taken out of circulation.
41 billion XRP remain under control by Ripple, most in escrow lock-ups. It further runs many businesses, including its RLUSD stablecoin, prime brokerage provider Hidden Road, custodians Standard Custody and MetaCo, and stablecoin payment platform Rail.
VivoPower’s acquisition makes it the only US-listed firm that gives shareholders exposure to both Ripple shares and XRP tokens. The arrangement aims to lower the effective acquisition price of XRP compared to buying it directly from the market.
Acquisition Valued at 86% Discount to XRP Reserves
VivoPower anticipates high value potential from this transaction. On average, each $10 million in Ripple shares would provide $5.15 in value per VivoPower share. This is subject to market rates for XRP, VivoPower shares, and Ripple shares. Ripple alone’s holdings in XRP are worth around $135 billion.
VivoPower will purchase Ripple shares at a weighted average valuation of around $19 billion. That’s an 86% discount relative to the market cap of Ripple’s XRP reserves. By that calculation, VivoPower would be purchasing XRP at an implied price of $0.47 per token, without even counting Ripple’s other lines of business.
The firm also derives upside from Ripple’s expanding stablecoin businesses. RLUSD most recently formed a partnership with BNY Mellon, and the segment has demonstrated healthy growth. Ripple’s other segments, such as Hidden Road and Rail, create additional diversification to the investment.
Strategy Targets Yield Optimization and Cost Efficiency
VivoPower will acquire complete legal ownership of Ripple shares and list itself directly on Ripple’s shareholders’ register. The firm will avoid special-purpose vehicle arrangements because they involve additional expenses. Every quarter, an independent auditor will inspect Ripple holdings.
For transaction execution and custody, VivoPower has partnered with BitGo and Nasdaq Private Market. This will provide secure management for Ripple shares as well as XRP assets. VivoPower is positioning itself as the first XRP-centered digital asset enterprise.
The firm intends to maintain control of assets for the long term while facilitating development of the XRP Ledger and associated blockchain use cases. By entering into this paired investment in Ripple shares and XRP tokens, VivoPower is seeking a combination of yield optimization and cost-effectiveness that it expects can provide excellent returns to shareholders.
Related Reading: Bitcoin Faces Critical Resistance at $117,600: Is a Bullish Momentum Coming?
