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Bloomberg
MoneyGram International Inc soared as much as 155 percent in early trading after a tie-up with blockchain-technology company Ripple. The rally is reminiscent of late 2017, when a wave of small-cap stocks saw valuations multiply as they re-branded as blockchain companies.
The difference is that MoneyGram is an established company with about 2,400 staff and $1.4 billion in annual revenue, not a re-branded unprofitable iced tea-maker or a three-man IT firm based out of a business park in Essex, England.
Not to mention that Ripple’s deal comes with real money: it invested $30 million in shares and warrants and has an option to invest a further $20 million.
Ripple’s investment will see it become MoneyGram’s main partner for cross-border transactions using digital assets, reducing operating costs and working capital requirements, the company said in a statement. MoneyGram shares gained with almost fourteen times the three-month daily average volume of shares traded in the first ten minutes after the market open.
“The tie-up with MoneyGram and Ripple underscores two key points — first, investment into and from the blockchain and cryptocurrency sector is coming off the sidelines,†said Nigel Green, chief executive of independent financial consultancy Devere Group.
Facebook’s plans for a new currency that it hopes will one day trade on a global scale, much like the US dollar, are further propelling blockchain and cryptocurrencies into the mainstream. Shares of the social-media giant are up 1.4 percent after it unveiled details of Libra, which will launch as soon as next year.
Bitcoin climbed past $9,000 to its highest since May 2018, and traded at about $9,200 in London on Tuesday.
At the same time, prominent Bitcoin bull Thomas Lee said that the digital currency is primed for a “Fear Of Missing Out†rally that could see it hit as high as $40,000 in a few months.