Ripple Labs, the company behind the XRP token, appears to have offered its early investors an alternative exit strategy in the form of a share buyback.
According to a Wednesday report from Reuters, citing two sources familiar with the matter, the company plans to buy back $285 million worth of shares from early investors and employees.
The tender offer would value the company at $11.3 billion, and investors would be allowed to sell a maximum of 6% of their stake in the firm.
This isn’t the first time that Ripple has engaged in a share buyback – the company repurchased shares in January 2022 after it secured a $200 million funding round. At the time of that buyback, Ripple was valued at $15 billion.
Ripple later confirmed the tender offer to Reuters, adding that the firm plans to spend $500 million in the proposed buyback to cover the costs of converting restricted stock units into shares and taxes.
Ripple CEO Brad Garlinghouse also told the publication that the firm plans to do more share buybacks on a regular basis as a means to provide liquidity for investors, but has no plans for an Initial Public Offering (IPO) given the “regulatory uncertainty” in the U.S.
For the better part of two years, Ripple was engaged in a legal battle with the U.S. Securities and Exchange Commission (SEC), with the regulator claiming that the firm had offered unregistered securities from the sale of XRP tokens.
In July 2023, a U.S. District Judge granted Ripple a partial victory, ruling that the sale of XRP on exchanges and other platforms did not constitute investment contracts.
At the time of writing, XRP was trading at $0.60, gaining 5.8% over the last 24 hours, joining a host of altcoins that rallied after the SEC approved 11 spot Bitcoin ETFs earlier today.