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- To unlock value, GAM suggested that SBI increase transparency by publishing daily XRP valuations and regularly updating shareholders on its net asset value.
- GAM highlights a significant gap between SBI’s market value and the hidden worth of its crypto assets, specifically its indirect holdings in Ripple.
Swiss-based investment manager GAM Investments has urged Ripple partner SBI Holdings to adopt an ambitious XRP-focused strategy. As a result, the Swiss investment manager urged SBI to initiate an XRP buyback program, while recommending a similar strategy similar to MicroStrategy’s Bitcoin accumulation. The letter emphasizes SBI’s market undervaluation and suggests a plan that mirrors MicroStrategy’s successful strategy with Bitcoin.
In the letter, GAM Investments argues that SBI Holdings, which holds a major stake in Ripple Labs and its XRP Holdings, is trading at a steep discount to its net asset value. According to GAM, SBI’s indirect holdings in Ripple, valued at over JPY 1.6 trillion, surpassing the company’s current market capitalization of JPY 1.2 trillion. This highlights a significant gap between SBI’s market value and the concealed worth of its crypto assets.
Additionally, GAM Investments also pointed out the lack of clarity from SBI surrounding Ripple’s blockchain technology and how its crypto investments have led to underperformance in the company’s stock price. Other Japanese firm Metaplanet, which has replicated MicroStrategy’s Bitcoin accumulation strategy, has seen its stock price surge massively this year. Today, the Metaplanet stock has gained 20%, hitting its yearly high of 4,000 JPY.
GAM Proposes XRP Buyback Program to Unlock Value for SBI Holdings
In order to address the issue of SBI’s undervaluation and unlock shareholder value, GAM Investments has put forward several recommendations. It suggested that SBI should increase transparency by publishing daily valuations of its XRP holdings and providing regular updates to shareholders on its net asset value (NAV) components.
Also, one of the major proposals by GAM is for SBI to implement an XRP buyback program. GAM recommends that SBI use a portion of its cash flow from its banking and securities businesses to purchase XRP directly from the market. As per GAM, this move will reduce the XRP supply in the market circulation, ultimately leading to an increase in its value. The Swiss asset manager stated that this would ultimately benefit the shareholders in the long term.
SBI Holdings currently has an 8-9% stake in Ripple Labs and has been supporting blockchain and crypto adoption for a long time. Despite this, the market hasn’t recognized the company’s significant XRP holdings and involvement with Ripple. This has ultimately led to its undervaluation, noted GAM Investments.
By adopting the proposed buyback program, GAM believes SBI could unlock substantial value for shareholders and bring its market capitalization closer to its true NAV of JPY 3.9 trillion.
XRP ETF Developments in the Making
Following the victory of Donald Trump last month, there has been growing expectation of getting an XRP ETF into the market. Earlier this month, WisdomTree filed for a spot XRP ETF with the US SEC and is awaiting approval for the same, reported CNF.
On the other hand, recent rumors floated that BlackRock could be filing for an XRP ETF. However, Jay Jacobs, Head of BlackRock’s ETF Department, has confirmed that the investment giant has no immediate plans to launch an XRP exchange-traded fund (ETF), reported CNF.
