Ripple Labs Announces $700M Share Buyback at $175

Ripple Labs unveils a $700 million share buyback program, valuing its shares at $175 each. This strategic decision underscores the company’s strong financial position and its confidence in its future growth trajectory. Will this focus delay Ripple’s IPO plans?

Ripple Labs to Buy Back Shares at $175 Each in a $700M Plan

Notably, Ripple CEO Brad Garlinghouse informed stakeholders via email that the $700 million tender offer commenced on June 10 and will remain open until July 9. According to investor Jeremy Raper’s X post that incorporates a screenshot, the plan provides a one-month window for eligible shareholders to participate.

Significantly, Ripple’s move underscores the platform’s financial strength and growth ambitions. As revealed in the scheme, the $175 per share offer represents a 135% premium over Ripple’s recent secondary market price, which was around $74-$75 on platforms like Hyve. This highlights the attractive valuation for participating shareholders.

The company has also increased the buyback price and size compared to its January tender offer, which was $125 per share. With the $175 per share buyback price, Ripple’s implied valuation is approximately $25 billion, reflecting the company’s significant growth and increased worth.

Further, Garlinghouse expressed confidence in the company’s momentum and trajectory. He noted that holders of eligible vested stock options or shares could participate in the sale.

Despite this development, the XRP price remains red, facing a notable decline of 3.5%. Currently trading at $2.23, the token has seen a 7.5% dip in its trading volume.

Will Ripple’s Buyback Plan Delay Its IPO?

Interestingly, Ripple’s buyback plan comes amid increasing anticipations of an initial public offering (IPO). Investors speculate that Ripple’s valuation could reach $35-50 billion if the company were to go public, driven by its significant crypto asset reserves and expanding ecosystem.

Ripple had previously stated that an initial public offering (IPO) is not an immediate priority, a stance reaffirmed during the January tender offer. Garlinghouse indicated that it would not pursue an IPO in the near term, focusing on other priorities like collaborations and expansions instead. Ripple’s decision to buy back shares for the second time in less than a year further suggests the company is managing its equity ownership and shareholder expectations internally, rather than opting for a public listing.

Garlinghouse clarified that the firm will only explore the possibility of an IPO after the XRP lawsuit settlement. He noted,

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.