Blockchain payments firm Ripple has rolled out a share buyback program that values the company at $50 billion, as per a CoinDesk report.
The report quoting people familiar with the matter, said that the company will be buying $750 million worth of shares from investors and employees via a tender offer that will run through April this year.
The update comes a day after the company said it would be acquiring BC Payments Australia to solidify its presence in the APAC region through an AFSL license—and follows rapid expansion over the past 15 months, in which Ripple conducted multiple acquisitions, raised $500 million at a $40 billion valuation, and secured over 75 regulatory licenses after its money license from Luxembourg.
A share buyback occurs when a company purchases its own stock from public markets. They may have multiple reasons as to why they do this, but they do it most commonly for the following reasons:
- To make growth decisions more quickly without being held back by too many shareholders
- To compensate existing shareholders who have held shares for a long period of time
- To increase the value of shares by reducing supply
The XRP token suffered massive losses in the October crash and remains down at lows ranging between $1.37 to $1.40. Despite its multiple acquisitions over the last year and expansion in the number of regulatory licenses, the company’s bullishness has not kept the price of the XRP token steady.