Did you know that you can buy Ripple shares before they do their Initial Public Offering (IPO)? This means they are coming out with an actual stock that you can get in before the company goes live on the markets, and will be traded as a security in the United States.
However, the IPO won’t occur anytime soon unless Ripple Labs prevails in the SEC lawsuit, which is the subject we will delve into, illustrating precisely how it can be achieved through private equity investing.
Ripple Versus SEC Update
On October 19, 2023, The SEC dropped charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen. This means they are no longer accused of aiding and abetting the company in violating securities laws related to XRP sales. This was a major victory for Ripple, following the July 2023 ruling that declared XRP itself not a security when sold to retail investors.
However, the lawsuit is not entirely over. There is still a remaining charge against Ripple regarding selling XRP directly to institutional investors, which the court believes might have required SEC registration. The SEC is also continuing discussions with Ripple to resolve the remaining issue, but could potentially appeal the July 2023 ruling on XRP being non-security.
By April 29, 2024, both parties must complete the discovery and rebuttal process concerning potential remedies for the remaining charge. A potential trial could follow, but a final date has not been set.
Ripple IPO Rumors
Throughout the past year, numerous rumors surfaced regarding an imminent announcement of a Ripple IPO. In some conferences, Ripple CEO Brad Garlinghouse reiterated several times the potential for an IPO for Ripple on the US stock market. This type of offering differs significantly from Initial Coin Offerings (ICOs) common in the cryptocurrency space and would likely involve trading on NASDAQ.
How To Invest In Ripple?
You can currently participate in the pre-IPO phase for Ripple Labs as a private equity investor through a platform called Linqto.
At the time of writing, Ripple is valued at approximately $41.31 per share, with a total valuation of $7.5 billion. Moreover, considering the market capitalization of XRP, it stands at $29 billion on CoinMarketCap.
This suggests that should Ripple Labs proceed with the IPO on the US stock market, contingent upon winning the SEC lawsuit, the company behind XRP will potentially have its own stock.
Funding Rounds
It is also intriguing to note that Ripple has engaged in several share buybacks. In 2024, they initiated a Series C buyback totaling $200 million, following similar buybacks in 2022 and 2020. They repurchased shares from investors during those periods and currently retain ownership of those shares.
Benefits Of Buying Ripple Stock At Pre-IPO
Investing in a pre-IPO offers a significant benefit in acquiring stocks at a lower cost. Normally, there’s an initial listing price indicated, often when a company announces its IPO at a set value. Yet, it rarely begins trading at that price; rather, it commonly experiences an upward surge driven by pre-market activity and enthusiastic bidding from investors.
What happens after that is completely up in the air, but it allows you to sell at a higher price instantly once the stock goes public.
Of course, there are inherent risks associated with investing in any venture. However, entering at a seed round or a pre-IPO stage typically offers a more favorable price point. You have the option to sell immediately upon the IPO launch to capitalize on your shares.
Alternatively, if you are inclined towards long-term holding and have faith in Ripple and XRP, especially considering the potential momentum from winning the SEC case, this could indeed represent a viable long-term investment opportunity.
Conclusion
What are your thoughts regarding the Ripple versus SEC case? Do you foresee Ripple emerging victorious in the lawsuit, and does the idea of investing in Ripple shares pique your interest? Furthermore, always bear in mind the importance of risk management when contemplating any investment opportunities.
