XRP Ripple Announces $200M Share Buyback

By Kevin • January 27, 2022 3:28 pm • Comments

Ripple has recently announced that they will buy back $200M shares worth of shares from investors which leads the firm to having a record valuation of around $15 billion.

Back in 2019, there was a Series C funding round that included prominent investors such as Tetragon Financial Group, SBI Holdings, and Route 66 Ventures acquiring $200M worth of shares.

However, these investors sought to distance themselves from the company in 2020 due to the emergence of the high profile lawsuit between Ripple and the SEC.

Trending: Ripple Spells Out Penalty Terms To SEC

CoinTelegraph explains:

However, in December 2020, the United States Securities and Exchange Commission issued a $1.3-billion financial lawsuit against Ripple Labs, as well as co-founder Chris Larsen and CEO Brad Garlinghouse, accusing the parties of using the native XRP token as an unlicensed digital asset security.

Intent on disassociating themselves with Ripple amid their high-profile and openly public lawsuit, Tetragon sued Ripple in early January 2021 in the Delaware Chancery Court, seeking to enact its contractual obligation of a buyback clause to the value of its undisclosed investment sum.

However, just three months later in April, the court ruled in favor of Ripple and against the plaintiff, Tetragon, putting an end to the financial dispute.

The story and outlook for Ripple seems to have turned for the positive for 2021 though.

This recent move from Ripple to willingly buy back its shares from these investors signals good news for XRP holders because it shows that Ripple is looking to improve its financial strength.

It also indicates that the company currently has a strong bank balance that is estimated to be around $1 billion at this time which the company says is the “strongest that it has ever been”.

Besides the news of this buyback and the increased valuation of the company, Garlinghouse shared some news regarding the future of RippleNet and Ripple X.

Ripple X is the new feature that will essentially enhance the utility of the XRP ledger which will make it much more usable for a variety of emerging industries such as non-fungible-tokens (NFTs), central bank digital currencies, and multichain functionalities.

If successful, the use cases of XRP will expand dramatically and will offer promising a promising outlook for the company and the future value of the XRP.

Protocol.com shares:

Tetragon and Route 66 Ventures could not immediately be reached for comment, and SBI Holdings declined to comment.

Share buybacks are uncommon but not unheard of among venture-backed companies.

“Typically, they are a very inefficient use of capital” for startups, Redpoint partner Tomasz Tunguz wrote in 2019.

“Despite these crazy headwinds with the SEC and frankly losing some customers because of the SEC lawsuit, we grew very quickly,” Garlinghouse told Protocol.

“Ripple’s business has materially grown. We have a strong balance sheet. Even after doing this repurchase, we have over a billion dollars in cash. We’re starting 2022 in a great position of strength.”

The company has also shared that the company is currently hiring and is looking to onboard hundreds of more employees this year.

At the time of this report, the company currently has around 500 employees and is looking to continue to expand as the company aims to diversify the markets that XRP can be used in and expand its network by working with a variety of partners.

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