Why VivoPower Seeks Ripple Shares at a Reduced Price Compared to Its XRP Assets

Ripple possesses billions in XRP, yet shares on private secondary markets don’t capture this fully, noted VivoPower advisory board member Adam Traidman.

Due to being a private entity, Ripple’s shares carry less liquidity than they would on public exchanges, with pricing mainly set through individual agreements—often at a discount to Ripple’s substantial XRP assets—Traidman informed Decrypt on Tuesday.

“It has historically been really challenging for Ripple to retain top talent due to the lack of liquidity,” remarked Traidman, who previously served on Ripple’s board and led SBI Ripple Asia, a partnership with the Japanese financial group SBI Holdings.

Ripple shares do possess some liquidity in private markets like Forge, albeit limited to accredited investors. On Tuesday, shares traded around $114, with completion of trades potentially taking up to 60 days, depending on negotiations.

Decrypt sought comment from Ripple.

Ripple’s past tender offers have offered current and former employees some liquidity, but with the rise of treasury firms for various cryptocurrencies—from Dogecoin to Tron—VivoPower has surfaced as a potential buyer, aiming for Ripple equity to enhance its XRP acquisition tactics.

On Thursday, VivoPower’s shares dipped to about $5.26, as per Yahoo Finance. Although the Nasdaq-listed firm’s stock has surged nearly 300% year-to-date, it has struggled to exceed a recent peak of $8.88 in late May.

The company announced earlier this month plans to acquire $100 million in privately-held Ripple shares at a $19 billion valuation. Excluding the value of Ripple’s business or RLUSD stablecoin, VivoPower stated this would yield XRP exposure at an 86% discount relative to the current market rate.

Although Ripple incurred no cost for its XRP inventory, VivoPower noted it would equate to purchasing XRP at $0.47 per token at that time.

Ripple-connected wallets controlled approximately 42 billion XRP as of Thursday, according to XRP Scan, valued at an estimated $121 billion based on crypto data from CoinGecko.

In the early stages of the company and network, XRP Ledger co-founders allocated Ripple 80 billion XRP. Most of the leftover funds—totalling 38 billion XRP worth $112 billion as of October—are held in escrow to ensure consistent XRP supply, as per the XRP Ledger’s website.

VivoPower co-founder and Executive Chairman Kevin Chin discovered the chance to buy Ripple shares during a conference in Singapore in June, he informed Decrypt. The subsequent period involved nearly two months of due diligence, he indicated.

“Ripple is the largest holder [of XRP], mostly in escrow, demonstrating over a decade that they are very disciplined in their market release,” he stated. “This gave us considerable confidence.”

An insider informed Decrypt that the shares VivoPower is seeking are not held by Ripple.

VivoPower delayed publicizing the deal until after the U.S. Securities and Exchange Commission’s long-standing litigation with Ripple concluded. The SEC’s appeal withdrawal and Ripple’s cross-appeal finalized a $125 million penalty against Ripple recently.

VivoPower estimated that its Ripple investment would correlate to 211 million XRP. The company introduced its XRP treasury strategy in late May, moving away from sustainable energy but does not disclose its XRP assets on its site.

Traidman mentioned that VivoPower is developing a transparency page to display its XRP holdings in a manner that’s “cryptographically verifiable independently of the XRP ledger,” although he conceded that proving Ripple’s shares, if acquired, may be unfeasible.

“That’s not on the blockchain, so we can’t validate it. However, we will transparently record how much we possess on our website,” he added.