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Ripple Partnership With Moneygram Not as Great as Ripple Bulls Believe?
Ripple Partnership With Moneygram Not as Great as Ripple Bulls Believe?

Ripple Partnership With Moneygram Not as Great as Ripple Bulls Believe?

January 16, 2018 Crypto News, Ripple


Ripple (XRP) bulls point to partnership deals with 3 out of the 5 top money transfer companies like Moneygram (NSDQ:MGI) https://ripple.com/ripple_press/ripple-and-moneygram-partner-to-modernize-payments/ but Jason Burack of Wall St for Main St shows how through its income statements and its stock chart that Moneygram is now a mediocre to crappy business with a market cap below $700 million. So how can a crypto currency with a valuation of almost $70 billion be using a partnership with a pretty crappy company whose business is worth less than $700 million for validation and justification that the price of XRP and market cap of Ripple MUST go higher?

Jason shows how Moneygram faces huge pressure in its operating margins and net profit margins. Moneygram’s annual 2016 ( annual 2017 numbers are not out yet) has extremely low operational margins of 5.4% and net profit margins of less than 1%. Net profit margins this low (although net profit margins were as high as 4.42% in 2014) do not give the company free cash flow and the ability to retain earnings to reinvest into growth in the business, make sound acquisitions and/or do share buybacks with free cash flow or pay dividends to shareholders. In other words, Moneygram’s business is not doing very well despite over $1 billion per year in revenues.

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