Veteran Wall Street analyst Linda Jones has laid out a comprehensive scenario where Ripple could potentially set a new benchmark in IPO valuation history. Speaking with Digital Perspectives, Jones elaborated on her predictions about the company’s future, particularly focusing on its pre-IPO share value.
Pre-IPO Shares Have The Potential For A 2000% Rise
She began her analysis by referencing the current valuation of pre-IPO shares on Linqto, a platform for private investing. “According to Linqto, at $35 a share, which is slightly under $34 today on the Linqto website, that is a $5.7 billion valuation for Ripple stock,” Jones stated. This figure, she noted, is notably lower than the enterprise’s past buyback at a valuation of $15 billion.
The critical aspect of Jones’ analysis hinges on the company’s substantial holdings in XRP. “Ripple has 42 billion XRP in escrow,” Jones explained, highlighting the current XRP price of $0.50.
This pegs the XRP’s worth at around $21 billion, a figure that starkly contrasts with the present valuation, being four times higher. “That makes the XRP worth $21 billion, which is crazy because that’s four times what Ripple is valued at right now,” Jones emphasized, indicating a possible undervaluation.
Jones drew parallels to Coinbase’s IPO, which she described as highly successful. “Coinbase… had an $86 billion valuation. It opened at $250 a share, went up to $429 a share, and closed at $328 a share on its IPO.” Using this as a benchmark, Jones postulated that the fintech firm could achieve a similar feat.
She speculated that combining Ripple’s potential valuation with its XRP holdings could lead to an aggregate worth of approximately $107 billion, a stark contrast to its current valuation on Linqto. This valuation would correspond to about 20x (or 2,000%) the current selling price of pre-IPO shares on Linqto.
Why Ripple Could Shatter Records
A significant factor in Jones’ analysis is the potential resolution of Ripple’s ongoing legal battle with the SEC and the consequent impact on XRP’s price. She posited a scenario where XRP returns to its previous ATH of $3.59, thereby valuing Ripple’s escrowed XRP at a whopping $150 billion. “You can’t have XRP worth $150 billion and Ripple stock worth less. That doesn’t make any sense,” she argued, drawing attention to the discrepancy.
Comparing the firm’s with technology behemoths like Nvidia, Apple, and Amazon, Jones suggested Ripple could be on par with these giants in terms of valuation, considering its assets and market impact. “We have world-class companies, which I think Ripple fits in with some of those world-class companies,” she remarked, acknowledging the company’s shorter history but emphasizing its potential.
Jones concluded her analysis on an optimistic note, albeit with a caution about its speculative nature. “I could see where we could have a new record for a company at its IPO valuation. And that Ripple could be the company that makes that new record,” she stated. This prediction puts the company’s potential stock value at an estimated $350 billion, or even half a trillion dollars, considering its XRP holdings and market position.
At press time, XRP traded at $0.53287.
Featured image from Shutterstock, chart from TradingView.com