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VivoPower International Surges After Strategic Investment in Ripple Labs
VivoPower International, a Nasdaq-listed sustainable energy firm, experienced a remarkable surge in its stock price, climbing over 52% to close at US$5.94 (approximately AU$9.10) following the announcement of a significant US$100 million (AU$153 million) investment in shares of Ripple Labs.
Investment Overview
The acquisition will be made from existing shareholders and is pending approval from Ripple’s management. This move marks VivoPower as a pioneering US-listed company, offering its investors unique exposure to both Ripple’s private equity and its cryptocurrency, XRP.
According to Kevin Chin, VivoPower’s executive chairman and CEO, the dual strategy aims to optimise yield while minimizing the average cost per XRP acquisition. Chin noted, “The opportunity to acquire Ripple shares and materially average down the acquisition price per XRP is in line with our objective of building a sustainable long-term treasury model that translates into substantial potential upside for shareholders.”
Market Reaction
Post-market trading witnessed VivoPower’s shares continuing their upward trajectory, gaining an additional 16%. Over the past six months, the stock has skyrocketed over 552%, reflecting investor optimism surrounding the company’s new direction.
VivoPower plans to collaborate with BitGo and Nasdaq Private Market to ensure the safe custody of the shares and efficient execution of the stake. This partnership will also involve an independent audit of holdings each quarter to maintain transparency.
A Strategic Move
Ripple recently concluded a prolonged legal dispute with the SEC, which has positively impacted its operations. Currently, Ripple holds approximately 41 billion XRP, most of which is locked in escrow, from the total of 100 billion issued at its inception. The company has also destroyed nearly 14 million tokens, further tightening supply.
VivoPower’s chairman, Adam Traidman, highlighted that the blended purchase model employed by VivoPower might reduce the effective cost of XRP to around US$0.47 (AU$0.72) per token—an impressive 86% discount compared to market rates based on Ripple’s XRP reserves.
“By purchasing Ripple shares, not only will VivoPower acquire XRP at valuations up to an 86% discount versus buying XRP outright on the market, we will also gain a stake in Ripple’s RLUSD stablecoin and its other business units, including Hidden Road, Rail and Metaco,” Traidman explained.
Conclusion
VivoPower’s strategic investment in Ripple Labs signifies a noteworthy development in the nexus between traditional finance and cryptocurrency. This not only positions VivoPower advantageously within the burgeoning digital asset space but also reflects an evolving market landscape where sustainable energy firms align with crypto innovations for growth and profitability. As the company continues to navigate this complex terrain, stakeholders will be keenly observing its performance and the broader implications of its strategic decisions.
