VivoPower Internationalβs stock surged after announcing plans to purchase $100 million worth of Ripple Labs shares as part of an expanded XRP-focused treasury strategy.
Key Takeaways
- 1VivoPower will purchase $100 million in privately held Ripple shares after two months of due diligence.
- 2The move will make it the first US-listed firm to offer exposure to both Ripple equity and XRP tokens.
- 3The strategy could give VivoPower XRP at an implied cost of $0.47, 86 percent below market prices.
- 4Partnerships with BitGo and Nasdaq Private Market will manage custody and transactions.
What Happened?
VivoPower International PLC, a Nasdaq-listed solar power company, saw its stock jump more than 32 percent to $5.10 on Friday after revealing plans to acquire $100 million worth of Ripple Labs shares from existing shareholders. The deal, still pending Ripple executive management approval, follows two months of due diligence and is part of the companyβs broader plan to build a diversified XRP-focused digital asset treasury.
VivoPowerβs Dual Investment Strategy
VivoPower will not only purchase Ripple shares but will also continue acquiring XRP tokens directly. This combined approach is designed to optimize yield while reducing the weighted average cost of XRP acquired. According to VivoPower, every $10 million in Ripple shares purchased could add an estimated $5.15 per share in value for its own shareholders, though the figure depends on market volatility. By buying Ripple equity at a valuation of roughly $19 billion, VivoPower calculates an implied XRP price of $0.47 per token, representing an 86 percent discount to current market prices.
Kevin Chin, Executive Chairman and CEO of VivoPower:
“Our portfolio construction strategy is to buy a combination of Ripple shares and XRP tokens. This will allow us to optimize for yield maximization while also minimizing the weighted average cost of XRP acquired.”
Rippleβs Broad Business Portfolio
Ripple, creator of the XRP token, initially issued 100 billion tokens and currently holds about 41 billion, mostly in escrow. Around 14 million tokens have been burned to date. In addition to XRP, Ripple operates:
- RLUSD, a US dollar-backed stablecoin
- Hidden Road, a digital asset prime broker
- Custodians MetaCo and Standard Custody & Trust
- Rail, a stablecoin payment platform
These diversified business units add further value to Ripple shares beyond their XRP holdings, providing VivoPower with potential exposure to multiple revenue streams.
Custody and Compliance Measures
To safeguard the Ripple shares and tokens, VivoPower has partnered with BitGo for custody and with Nasdaq Private Market, Rippleβs preferred private share transaction partner. An independent auditor will review the companyβs Ripple holdings on a quarterly basis to ensure transparency.
Wider Ripple Ecosystem Developments
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. Ripple also 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.
CoinLawβs Takeaway
I think VivoPowerβs move is one of the more strategic plays we have seen from a publicly listed company in the digital asset space. Instead of simply buying XRP on the open market, they are getting it at a massive discount through Ripple equity, while also gaining exposure to Rippleβs growing stablecoin and payment businesses. This is the kind of creative structuring that could inspire other institutional players to rethink their crypto acquisition strategies. If Ripple continues to expand and XRP adoption grows, VivoPower could be sitting on a treasure chest that was bought at clearance prices.
