VivoPower's Ripple Bet: Stock Surges on $100M XRP Investment

VivoPower's stock jumped after investing $100M in Ripple shares. This move offers a strategic approach to XRP exposure at a discounted rate.

VivoPower's Ripple Bet: Stock Surges on $100M XRP Investment

VivoPower International, a solar power company, is making waves with its bold move into the crypto space. The company's stock recently surged after announcing plans to purchase $100 million worth of Ripple Labs shares, signaling a significant expansion of its XRP-focused treasury strategy.

Key Takeaways: A Dual Investment Approach

VivoPower isn't just dipping its toes; it's diving in headfirst. The company plans to acquire Ripple shares from existing shareholders, a deal pending Ripple executive management approval. But that's not all! VivoPower will also continue acquiring XRP tokens directly. This combined approach aims to optimize yield while minimizing the weighted average cost of XRP acquired.

The Numbers Game: Discounted XRP and Potential Gains

Here's where it gets interesting. VivoPower estimates that every $10 million invested in Ripple equity could add an estimated $5.15 per share in value for its own shareholders. By buying Ripple equity at a valuation of roughly $19 billion, VivoPower calculates an implied XRP price of $0.47 per token – a significant discount compared to current market prices. At the time of the announcement, XRP was trading at $3.3.

Ripple's Expanding Ecosystem

Ripple, the creator of XRP, isn't just about the token itself. The company operates the RLUSD stablecoin and has stakes in various digital asset ventures. This diversified business portfolio adds further value to Ripple shares, providing VivoPower with potential exposure to multiple revenue streams. Ripple recently closed a long-running legal battle with the US Securities and Exchange Commission, with both parties filing a joint stipulation to dismiss appeals, ending litigation that began in December 2020.

Custody, Compliance, and Strategic Partnerships

To ensure the safety of its Ripple shares and tokens, VivoPower has partnered with BitGo for custody and with Nasdaq Private Market for private share transactions. An independent auditor will review the company's Ripple holdings quarterly to ensure transparency.

Broader Ripple Adoption

The announcement comes amid broader adoption of Ripple products. In South Korea, crypto custodian BDACS launched regulated institutional custody services for XRP using Ripple Custody. In Japan, credit card company A Plus partnered with SBI VC Trade to let customers convert reward points into XRP, Bitcoin, and Ethereum.

CoinLaw's Perspective: A Strategic Masterstroke

CoinLaw's perspective is particularly insightful: VivoPower's move is one of the more strategic plays seen from a publicly listed company in the digital asset space. Instead of simply buying XRP on the open market, they're getting it at a massive discount through Ripple equity while also gaining exposure to Ripple's growing stablecoin and payment businesses.

The Big Picture: Institutional Interest in Digital Assets

VivoPower's investment underscores the growing interest among traditional financial institutions in integrating digital assets into their investment strategies, leveraging both equity and token exposure to capitalize on the sector's potential.

Looking Ahead

Will VivoPower's bet on Ripple pay off? Only time will tell. But one thing is clear: the company is thinking outside the box and exploring innovative ways to participate in the digital asset revolution. It's a bold move, and it will be interesting to see how it plays out. Maybe they'll be sipping margaritas on a yacht paid for by XRP gains someday. Who knows? The future is wild!