Backed by investors including Andreessen Horowitz and Google Ventures, Ripple Labs (Ripple) holds 41 billion XRP tokens, representing approximately 41% of all XRP tokens on issue 

VivoPower will become the first and only U.S.-listed company to provide exposure to Ripple

For $10 million of Ripple shares acquired, an estimated $5.15 of value per share could accrete to VivoPower

VivoPower today announced it is acquiring Ripple Labs (Ripple) shares, as part of a strategic enhancement to its XRP-focused digital asset treasury strategy. Following a two-month period of due diligence, VivoPower has budgeted to purchase an initial $100 million of privately held Ripple shares. This encompasses definitive agreements directly with current Ripple shareholders, which are subject to final approval from Ripple’s executive management. Aside from these transactions, VivoPower will continue to directly acquire and hold XRP tokens. Based on current market prices (which are subject to volatility and material change), a purchase of $100 million of Ripple shares translates into an underlying 211 million XRP token exposure with a current market value of $696 million.

Ripple minted a fixed 100 billion XRP tokens at inception and given there have been approximately 14 million XRP tokens burnt to date, the network is mildly deflationary. Ripple continues to hold 41 billion XRP tokens, primarily in escrow. In addition, Ripple has a number of operating businesses, including RLUSD, its stablecoin; the digital assets prime broker Hidden Road, MetaCo and the Standard Custody and Trust Company, as well as the recently acquired stablecoin payment platform company, Rail.

VivoPower will become the first and only publicly listed company in the United States that provides shareholders with exposure to Ripple shares as well as XRP tokens. On a weighted average basis, this dual-pronged strategy is intended to deliver an acquisition cost per XRP token that represents an exceptionally favorable discount to the market price of XRP. For $10 million of Ripple shares acquired, an estimated $5.15 per share of value accretion could accrue to VivoPower shareholders (this is based on factors including the current market prices of VVPR, XRP and weighted average purchase price of Ripple shares, all of which are subject to volatility and change).

Importantly, VivoPower will have a full and direct legal title of Ripple shares purchased and be recorded as a shareholder directly on Ripple’s cap table. VivoPower will not purchase any Ripple shares that are held in special-purpose vehicle structures (with embedded fees and costs). An independent auditor will conduct quarterly reviews of VivoPower’s Ripple shareholdings.

Kevin Chin, Executive Chairman and CEO of VivoPower, commented: “The opportunity to acquire Ripple shares and materially average down the acquisition price per XRP is in line with our objective of building a sustainable long-term treasury model that translates into substantial potential upside for shareholders. Our portfolio construction strategy is to buy a combination of Ripple shares and XRP tokens. This will allow us to optimize for yield maximization while also minimizing the weighted average cost of XRP acquired.”

Adam Traidman, former Ripple board member and Chairman of VivoPower’s Advisory Board, commented: “By purchasing Ripple shares, not only will VivoPower acquire XRP at valuations up to an 86% discount versus buying XRP outright on the market, we will also gain a stake in Ripple’s RLUSD stablecoin and its other business units, including Hidden Road, Rail and Metaco.”

Rationale for Purchase of Ripple Labs Shares

• Ripple is the largest holder of XRP tokens, with 41 billion valued at $135 billion at the current XRP price;
• VivoPower has the opportunity to acquire Ripple at a weighted average valuation of approximately $19 billion, representing an 86% discount to Ripple’s $135 billion holding of XRP tokens (assuming no value is ascribed to the rest of Ripple’s business units, including RLUSD, its stablecoin);
• With an initial budgeted $100 million acquisition of Ripple shares, VivoPower would effectively be securing an underlying position of 211 million XRP tokens with a current market value of $696 million;
• This infers that VivoPower would be buying XRP tokens at an implied price of $0.47 per XRP token (at current market prices which are subject to significant volatility, and assuming no value is ascribed to the rest of Ripple’s business units, including RLUSD, its stablecoin);
• Ripple has a growing stablecoin business, RLUSD, for which it has recently partnered with BNY Mellon. A comparable business is the highly successful recent IPO of Circle Internet Group; and
• In addition, Ripple has other business units, including a digital asset prime broker, Hidden Road and digital asset custodians being Metaco and the Standard Custody & Trust Company, as well as the recently acquired Rail, a stablecoin payment platform.

Digital Asset Infrastructure and Custody Partners

To support the execution and governance of its treasury strategy, VivoPower has engaged leading digital asset custodian and private market securities infrastructure providers, including BitGo and Nasdaq Private Market, LLC, the preferred partner of Ripple for transacting its shares. Securities-related services are offered through NPM Securities, LLC, a member of FINRA and SIPC. Nasdaq Private Market, LLC is operationally independent from Nasdaq Stock Market LLC.

To read our full press release, and to keep up with all of VivoPower’s releases, visit our Press Releases page.

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