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The value of MoneyGram International Inc. reached 155% at the start of the trading on Tuesday, after being associated with the company with operations based on the blockchain, Ripple. This rally recalls the end of 2017, when a wave of small cap stocks multiplied their value after changing brands to become a "chain company".
The difference is that MoneyGram is a well-established company with more than 2,400 employees and annual profits of $ 1,400 million. This is not an unprofitable iced tea brand nor a three man – led information technology company, established outside of Essex Business Park in England. Not to mention that the agreement with Ripple is accompanied by real money: the company has invested $ 30 million in shares and guarantees, while having the opportunity to invest an additional $ 20 million.
This investment will make Ripple the main partner for cross-border transactions with MoneyGram crypto-currencies. Reducing operational costs and working capital needs, the company said in a statement Monday. MoneyGram's shares increased with the volume increase, which was multiplied by fourteen times the average daily volume of three months (1,300%), during the first ten minutes of market opening. .
"The MoneyGram and Ripple partnership highlights two key points: First, investment in the blockchain and cryptocurrency sector comes from the background," said Nigel Green, Executive Director the Devere Group Independent Financial Advisory Group. "Second, the impact of this flow is well received by investors in a broader sense," he adds.
Facebook Inc.'s plans for a new currency that is expected to be traded globally one day, like the US dollar, are driving blockchain and crypto-currencies on a massive scale. Shares of the social media giant rose 1.4% after revealing details on the Librawhich will be published next year.
Bitcoin has exceeded 9,000 USD and reached its highest level since May 2018, after trading 9,200 USD at 11:45 in London Tuesday. At the same time, Thomas Lee, the eminent Bitcoin bull, said that digital currency was ready for a "Fear to Miss It" rally (FoMO) of up to $ 40,000 in a few months.
Translated version of the article by Joe Easton and Bloomberg published in Fortune
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