VivoPower Buys $100M Ripple Shares: XRP Strategy Boost
VivoPower Invests $100M in Ripple Shares to Enhance XRP Strategy
VivoPower International PLC, a company focused on sustainable energy solutions, has announced a significant investment of $100 million in Ripple shares. This strategic move aims to strengthen its digital asset portfolio, with a particular focus on XRP. The deal follows a two-month due diligence period, culminating in agreements with existing Ripple shareholders, pending final approval from Ripple's management.
First U.S. Public Company to Invest Directly in Ripple and XRP
This purchase positions VivoPower as the first U.S. publicly listed company to gain direct exposure to both Ripple shares and XRP tokens. Unlike indirect investments through special-purpose vehicles, VivoPower will directly own the shares and be registered as a shareholder on Ripple's cap table. This direct ownership avoids additional fees and complexities.
Ripple currently holds a substantial amount of XRP, estimated at around 41 billion tokens, primarily held in escrow. This large XRP reserve is a key asset for Ripple in the digital asset space. Additionally, Ripple owns several other ventures, including RLUSD (a stablecoin), Hidden Road (a digital asset prime broker), MetaCo, Standard Custody and Trust Company, and recently acquired stablecoin payment platform, Rail.
Discounted XRP Acquisition Strategy
VivoPower's strategy aims to deliver value to its shareholders by acquiring XRP tokens at a reduced cost. The company estimates that every $10 million invested in Ripple shares could add $5.15 to each VivoPower share. This approach allows for the acquisition of XRP at a significantly lower price than its current market value. VivoPower intends to continue acquiring XRP tokens in proportion to its Ripple share purchases, maintaining a balanced approach for long-term growth.
Buying Ripple Shares at a Discount
Kevin Chin, Executive Chairman and CEO of VivoPower, emphasized the long-term potential of this acquisition. He stated that the opportunity to acquire Ripple shares and effectively reduce the cost per XRP aligns with VivoPower's goal of establishing a sustainable treasury model that delivers significant returns to shareholders.
Adam Traidman, former Ripple board member and current Advisory Board Chairman of VivoPower, clarified that purchasing Ripple shares provides an opportunity to acquire XRP at a discount of up to 86% compared to buying XRP directly on the market. It also provides VivoPower with exposure to Ripple's stablecoin business and other ventures like Hidden Road and Rail.
With Ripple holding approximately 41 billion XRP tokens, valued at around $135 billion, VivoPower's ability to buy Ripple shares at an estimated $19 billion valuation represents a substantial discount. This discount makes the acquisition particularly advantageous for VivoPower, potentially creating added value for its shareholders.
Ultimately, VivoPower's $100 million investment in Ripple shares signifies a strategic move to expand its digital asset holdings. By acquiring Ripple shares and XRP tokens at attractive prices, VivoPower aims to generate long-term value for its shareholders and establish itself as a significant player in the evolving digital asset market.