Ripple Plans to Repurchase $285 Million Worth of Shares
Blockchain-based payments company Ripple is reportedly looking to buy back $285 million worth of company shares from early investors and employees. The company has set aside $500 million for this purpose, covering the costs of taxes and converting restricted stock units (RSU) into common stock shares. Investors will have the opportunity to sell up to 6% of their stake, valuing Ripple at $11.3 billion. Ripple CEO Brad Garlinghouse states that the company intends to repurchase shares regularly to provide liquidity for investors. However, he also mentions that Ripple has no immediate plans to go public due to regulatory uncertainties in the US.
Ripple’s Legal Battle with the SEC
Ripple faced a legal dispute with the US Securities and Exchange Commission (SEC) over allegations of engaging in unregistered asset securities offering through XRP sales. However, in July, U.S. District Judge Analisa Torres ruled that the automated and open-market sale of XRP does not constitute security offerings. Garlinghouse highlights that despite the challenges posed by the SEC lawsuit, 95% of Ripple’s customers are non-US financial institutions.
Hot Take: Ripple Prioritizes Investor Liquidity Amid Regulatory Challenges
Ripple’s decision to repurchase shares demonstrates its commitment to providing liquidity for investors amidst regulatory uncertainties. By setting aside a significant amount for buybacks, Ripple aims to support early investors and employees while maintaining control over its operations. The ongoing legal battle with the SEC has raised concerns about going public in the near future. However, Ripple’s focus on regular share repurchases reflects its dedication to investor satisfaction and confidence.
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