The latest MoneyGram (NASDAQ:MGI) news saw the company’s stock soar as it inked a deal with one of the biggest businesses in the blockchain space.
The Dallas, Texas.-based money transfer company is entering the blockchain industry by agreeing to a deal with Ripple, which is behind the cryptocurrency XRP. The agreement involves an investment of up to $50 million at prices that are roughly three times the closing price of MGI stock.
MoneyGram will use Ripple’s XRP technology for the purpose of handling transactions of digital funds across borders for at least two years, per the deal. Ripple said it agreed to purchase $30 million worth of freshly created MGI stock at $4.10 per share–the stock is currently selling at $2.70 per share.
The blockchain business can buy another $20 million more at its discretion at a minimum price of $4.10. MGI stock closed Monday at $1.45 per share, but the news led to the stock soaring to close to $4 a share, marking an increase of more than 150% in after hours trading.
Meanwhile, the cost of an XRP coin was also higher, growing more than 5% immediately after the announcement. MGI stock is surging about 18.1% on Wednesday following the news.
MoneyGram said after Monday’s announcement that it is in the process of completing the refinancing of a loan and revolving credit facilities with the investment impending. The business has roughly $900 million in total debt, per its most recent financial statements.