MoneyGram news about a deal with Ripple has MGI stock flying high on Tuesday.
MoneyGram (NASDAQ:MGI) says that the deal with Ripple will have the two companies working together on the cross-border payment process. This will be possible through the use of Ripple’s xRapid product.
The MoneyGram news also includes an investment in the company from Ripple. This has Ripple investing $30 million into the company. This comes in the form of newly-issued shares of MGI stock and warrants to purchase additional shares.
MoneyGram notes that the investment has Ripple purchasing the shares of MGI stock at $4.10. This represents a roughly 182% premium over the closing price of MGI stock on Monday. It is also above the stock’s highest price of $3.66 for the current year.
An additional part of the deal allows Ripple to purchase more MGI stock or warrants. This deal lets the company make purchase up to $20 million worth of stock or warrants for as little as the $4.10 price.
“We are very pleased with the terms of the Ripple investment which supports the Company with permanent capital and additional liquidity,” Larry Angelilli, CFO of MoneyGram, said in a statement. “This partnership also provides MoneyGram with the opportunity to improve operating efficiencies and increase earnings and free cash flow.”
MGI stock was up 102% as of noon Tuesday, but is down 60% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.