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Scenario: Ripple Goes Public


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Blog URL:  https://coil.com/p/Hodor/Scenario-Ripple-Goes-Public/3vhbFKIWB Should Ripple 'go public?'  I analyze some basic pros and cons in my latest blog on Coil, and include a hint about the ne

This is a great think piece. I'm sure Ripple staff have had these conversations before, whether or not they pursue going public. My only concern with an IPO (and it's a big one) is that public in

Doesn't produce any goods or services, billion dollar valuation.   

4 hours ago, PlanK said:

Maybe it's a gentle nudge by Brad to the SEC.

 

Hurry up and declare XRP not a security or we'll IPO and create even more work for you trying to figure out what the hell is going on.

 

I think Brad and Ripple have a feel of how it is going to be classified, they have been working with the sec for a year. I think the ipo has to do with what ripple knows.

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21 hours ago, Walter_S said:
On 9/8/2019 at 12:01 PM, iLeeT said:

Imo, as soon as Ripple announces an IPO the price of XRP will tank a lot, probably more than 20% in 24h

So....a typical Tuesday then?

I cry and laugh simultaneously.

 

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From Hodor's opening post (sept 2019):

What could Ripple do with $5 billion dollars? Well, for one thing, a massive influx of capital will sometimes create unanticipated outcomes. Unexpected wealth could prompt some executives to retire or scale back their work. Usually, however, this influx of capital from an IPO is used by the company to expand and achieve far greater levels of growth than they otherwise would.

Thus far, Ripple has been able to access capital from its consulting revenue, software sales and licensing, and its sales of XRP from its treasury.

But these sources don't compare to what an IPO could provide. Here's an interesting comparison:

All Ripple Sales of XRP, ever: $1.1 billion

Possible IPO cash influx: $5 billion

As you can see, an IPO would dwarf what Ripple is able to do on its own through sales of XRP; not only that, but the fact that Ripple is able to sell XRP might actually increase its IPO price. The world of high finance can yield some surprising possibilities.

Obviously the important execs would be given large golden handshakes to continue to work with the company

Ripple would be awash with billions which it could use to strategically to leverage itself into the cross border banking sector a lot faster than if it has only a few hundred million.

Where Ripple has to use guile now it could instead use its chequebook in the future.  It could set up ODL MM/exchanges wherever it chose.

Lets us suppose it retains 5 billion XRP and gives the rest to IMF.  ODL, and raising the price of XRP to $5 in the market place, would still be is the biggest money earner the company owned.

 

Edited by Julian_Williams
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On 1/25/2020 at 3:22 PM, BravoTango said:

I think Brad and Ripple have a feel of how it is going to be classified, they have been working with the sec for a years. I think the ipo has to do with what ripple knows.

There, I fixed it for ya ;)

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A thought that's going through my mind (it might be completely stupid): could Ripple do an IPO and with that money build the liquidity for different fiat-to-XRP corridors themselves? Something tells me there's something wrong with that idea though :p

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17 minutes ago, SquaryBone said:

There, I fixed it for ya ;)

Thanks my friend :) I was referring to Brad's statement below, but yes this has been going on for years:

Garlinghouse’s comment comes shortly after Commodity Futures Trading Commission (CFTC) Chairman  Heath Tabert touched on XRP’s regulatory status in an interview with Cheddar:

“We’ve been working closely with the SEC over the last year or so to really think about which falls in what box because I think if I hear anything from market participants it’s that we really need clarity. That without clarity it’s really difficult to figure out how these will eventually be regulated"

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5 minutes ago, BravoTango said:

Thanks my friend :) I was referring to Brad's statement below, but yes this has been going on for years:

Garlinghouse’s comment comes shortly after Commodity Futures Trading Commission (CFTC) Chairman  Heath Tabert touched on XRP’s regulatory status in an interview with Cheddar:

“We’ve been working closely with the SEC over the last year or so to really think about which falls in what box because I think if I hear anything from market participants it’s that we really need clarity. That without clarity it’s really difficult to figure out how these will eventually be regulated"

Thanks for clarifying :) I mistook that. What's weird to me is that Ripple has been working for so many years with the SEC and they still seem to be stuck in limbo.

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1 minute ago, SquaryBone said:

Thanks for clarifying :) I mistook that. What's weird to me is that Ripple has been working for so many years with the SEC and they still seem to be stuck in limbo.

Thanks, I agree with you...I could be wrong but I think they finally got it figured out and have a good sense of what the sec will do. I think the ipo talk by Brad ties into this somehow...I just can't figure out if it's good or bad, it's like a good movie and we're really going to like or hate the ending lol...

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Ripple was recently valued at $10B in its series C funding.

But Ripple (even if in Escrow) has close to 50B XRP, then that alone should be close to 10B in value. So I don't think that figured in to the $10B valuation. If we assume it is the valuation of the business outside of their escrow holdings (don't know why they would value it like that), then when they go public in a year or so, we could assume that part of the business to be worth say $20-50B in total (a 2 to 5x growth from today). Best case scenario, they create $40B in value.

Let's contrast that with the potential from the XRP escrow. Even if XRP were to stabilize at $1.25 in the next 2-3 years, Ripple will hold an additional $50B worth of XRP.  Every dollar appreciation in XRP value in another $50B in value for them.

From all the work that is being done with regulatory bodies, acquisitions to improve liquidity, partnerships with exchanges etc, I don't think they have given up on XRP and just proceeded to working on their fintech solutions primarily. In my perspective they have some confidence that the IPO will not hurt XRP and their efforts to build an ecosystem around it.

The real question, and I can't see enough info to answer it is, if and to what extent will it help XRP other than by helping Ripple be more successful/legtimate? The most simplistic answer I have is, there is a real threat of XRP losing relevance due to the inaction of regulatory bodies (JPM coin /CBDCs minimizing the need for a XRP use case) or to a much lesser extent by being securitized, and hence they're forcing some movement through this.

This year will definitely be a defining one for XRP.  Hope it's a good one for all our sakes.

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1 hour ago, LungiDevil said:

Let's contrast that with the potential from the XRP escrow. Even if XRP were to stabilize at $1.25 in the next 2-3 years, Ripple will hold an additional $50B worth of XRP.  Every dollar appreciation in XRP value in another $50B in value for them.

I believe this mechanism will drive some rampant speculation if (when) the utility can deliver. Stock holders would benefit from the XRP price going up as you said. XRP holders would stand to benefit as the XRP price appreciates at the stocks performance.  If positioned well, you could literally double dip on the gains.  Why/how would this happen, you ask?  Greed.

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