The world of blockchain penny stocks has been like the wild west. Volatility like this has only been seen during several market “bubbles.” But is this latest bullish trend for sector stocks still considered a bubble? Or is this actually something with staying power? The verdict’s still out but what we’re seeing right now is big, penny stock news sparking a HUGE move for one stock in particular.
What Was This Big Penny Stock News?
Have you ever heard of MoneyGram (MGI Stock Report)? If not, you’re probably still living in a world where your money’s under your mattress. In any event, MoneyGram is one of the world’s largest money transfer companies. This has been one of the “pre-Venmo” ways that people “back in my day” used to transfer funds if they didn’t live down the street from you (among other things).
After the market closed on June 17th, both MoneyGram and a little blockchain company you might have heard of, Ripple, announced a strategic partnership. This event itself could spark all the HODLers of Ripple to lose their minds to be ready for the sh*tposting to start early tomorrow morning. That’s if it hasn’t begun to already.
But in all seriousness, this deal could actually have some staying power to it. Let me explain why. Ripple itself has some real-world applications. Unlike the thousands of other “digital platforms,” Ripple has a true to form efficiency when it comes to money transfer. This deal now makes Ripple the key partner of MoneyGram for things like cross-border payment and forex settlement using “digital assets.” I assume these “digital assets would be Ripple currency itself.
What Happens Now?
According to the press release, Ripple will focus on its xRapid product. This is a solution for on-demand liquidity. It reduces reliance on “pre-funding” and allows money to be transferred from one currency and settled immediately in the destination’s currency.
By using the XRP coin itself for settlement, the parties will not only save on time but also fees. Ripple settles out at fractions of a penny instead of $30 or more for things like same-day wire transfers.
“We are very pleased with the terms of the Ripple investment which supports the Company with permanent capital and additional liquidity…This partnership also provides MoneyGram with the opportunity to improve operating efficiencies and increase earnings and free cash flow.”Larry Angelilli, Chief Financial Officer of MoneyGram
We’ll see what happens this week. Many times, when it comes to blockchain penny stocks, news can become a catalyst but a short term one at that. With the case of MoneyGram and Ripple, however, this deal is more than just an announcement of “hey, we’re into crypto no.” In this case, the fine print should be looked at and I would definitely still be paying close attention to what happens with MoneyGram’s current refinancing efforts on its first lien term that they cited in the PR.