Exploring Ripple’s Potential Initial Public Offering

The Resurgence of Ripple IPO Speculation

In a recent development, well-known XRP advocate John E. Deaton has stirred conversations regarding a potential initial public offering (IPO) for Ripple. Deaton took to social media platform X to emphasize that the timing might play a crucial role. He drew parallels with Circle, a stablecoin issuer, whose public offering unveiled the depth and resilience of the U.S. equity markets. Deaton’s analysis suggests that if Circle can achieve a market valuation between $62 billion and $75 billion, Ripple’s valuation could potentially exceed $100 billion.

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According to Deaton, Ripple CEO Brad Garlinghouse has expressed that the company is not in a hurry to go public, primarily because they do not have an urgent need for additional capital—a common reason for companies to pursue an IPO. However, the timing could be a significant consideration. Deaton pointed out that with Ripple’s nearly 40 billion XRP, valued at around $2 per token (equating to an $80 billion valuation), reaching a $100 billion market cap is plausible under current market conditions.

Ripple’s Rapidly Increasing Private Valuation

Deaton’s assertions come on the heels of Ripple’s announcement of a $700 million tender offer, pricing private shares at $175. This represents a 135% increase compared to recent secondary trades on platforms like Hyve and is almost three times the $65 tender from two years prior.

This new pricing suggests an equity valuation of approximately $25 billion for 141 million outstanding shares. The previous buy-back in January was settled at $125, indicating a swift rise in the company’s internal valuation. Documents related to this offer reveal Ripple holding $3.7 billion in cash, no debt, and 41 billion XRP—an asset worth about $94 billion at market value or $47 billion with a 50% discount.

Despite these developments, Ripple’s management has reiterated that liquidity events are primarily for organizational purposes. “An IPO is not a priority,” remarked CEO Brad Garlinghouse in an email to shareholders accompanying the tender offer. Nonetheless, regulatory challenges might be a significant obstacle. The U.S. Securities and Exchange Commission (SEC) recently retracted its appeal against Judge Analisa Torres’s ruling, which determined that programmatic XRP sales are not securities. Garlinghouse welcomed this decision as a “long-overdue surrender.”

Ripple and the SEC negotiated to dissolve the remaining injunction, agreeing to split a previously imposed $125 million penalty, with $75 million returning to Ripple and $50 million going to the SEC. This joint motion was filed on June 13 and is awaiting Judge Torres’s approval. A previous $50 million proposal was dismissed in May due to procedural issues, but the current submission is expected to conclude the lengthy litigation.

Deaton’s $100 billion valuation estimate considers Ripple’s XRP escrow as a fundamental asset base, assuming public investors might value it at or above its current market price. This approach deviates from the valuation model used for Circle, which had its New York Stock Exchange debut on June 4, raising $1.1 billion at a $6.9 billion valuation, despite having $62 billion in USDC circulating on-chain.

Critics argue that Circle’s tokens are liabilities rather than residual assets, and historically, public-market investors have been reluctant to pay dollar-for-dollar for native coins held by issuers. However, even without considering the escrow, Ripple’s cash reserves, securities, and operating income support a multi-billion valuation that could significantly increase if XRP’s price remains above $2.15.

Could Ripple Surpass Coinbase’s Historic Listing?

If Ripple proceeds with an IPO at a fully-diluted $100 billion valuation, it would surpass Coinbase’s $86 billion direct listing record set in April 2021, establishing a new milestone for crypto-native equity listings. Deaton’s perspective outlines a scenario where Ripple could break records, driven by two factors: a legal resolution easing regulatory burdens and an expanding XRP treasury, whose market value now eclipses Ripple’s current private-share valuation.

Judge Torres’s decision on the June 13 motion is anticipated as the next significant development. A favorable ruling would allow Ripple to conclude its SEC-related challenges with reduced penalties and a legal victory that could bolster its IPO roadshow.

While Garlinghouse has consistently stated that Ripple is not in a rush, the tender-offer terms are set to expire on July 9. Investors will closely scrutinize any subsequent corporate communications or NASDAQ Private Market updates for indications of a potential registration statement. As of the latest update, XRP is trading at $2.168.

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