moneygram stock investment
Source: istock

Is MoneyGram Stock a Good Investment?

By

Sep. 4 2020, Updated 8:50 a.m. ET

MoneyGram International is a leading global money transfer service. The company's main competitor is Western Union. However, MoneyGram also competes with a host of other digital services including PayPal’s Xoom. Moneygram stock has been at its lows for a long time. Is the stock finally a good investment for bargain hunters? 

Article continues below advertisement

MoneyGram stock has been under pressure since the company lost its deal with China’s Ant Group in 2017. Ant Group, formerly called Ant Financial, initially agreed to acquire MoneyGram for $880 million. Later, Ant Group boosted its MoneyGram offer to $1.2 billion to fend off a rival bid from Euronet. However, U.S. authorities blocked the MoneyGram-Ant deal on national security grounds. Alibaba owns a third of Ant Group, while Alibaba founder Jack Ma controls the business. 

Article continues below advertisement

Before Ant Group showed up, Euronet wanted to buy MoneyGram in 2008. MoneyGram explored a sale in 2013 and Euronet was also viewed as a potential bidder. MoneyGram continues to attract buyout interest. Western Union has explored buying MoneyGram. Some investors wonder if MoneyGram stock is a good investment now. 

Article continues below advertisement

Away from takeover interests, MoneyGram has entered several strategic partnerships that have drawn a lot of investor attention to the stock. For example, MoneyGram struck a deal with cryptocurrency company Ripple in 2019.  Ripple agreed to invest as much as $50 million in MoneyGram stock while Moneygram adopted Ripple’s blockchain technology to enhance its international money transfer service.  

Article continues below advertisement

Where does MoneyGram stock trade?

Although MoneyGram stock trades on Nasdaq, it didn't originally. When the stock went public in 2004, MoneyGram traded on the NYSE. MoneyGram transferred its stock from the NYSE to Nasdaq in May 2013. The company said that the shift would allow it to reduce its listing fee and get some trading cost benefits for its shareholders. Even though MoneyGram moved its stock listing from the NYSE to Nasdaq, it maintained “MGI” as its ticker symbol. 

Article continues below advertisement

What is MoneyGram's stock price history?

MoneyGram's stock price history goes back to 2004 when the money went public after separating from its parent Viad Corp. The stock went public at $16.93 per share. In May 2006, MoneyGram's stock price shot up to $289.60, which is still its all-time high. 

MoneyGram's stock price was $13 in January 2017 when Ant Group made its buyout offer. The offer valued the company at $13.25 per share and later rose to $18 after Euronet made a $15.20 per share counteroffer. However, MoneyGram's stock price history shows that it trades at a steep discount to its all-time high.

Article continues below advertisement
moneygram stock split
Source: istock

MoneyGram International stock split

MoneyGram has split its stock once since it went public. The company implemented a 1-for-8 reverse stock split in November 2011. The split meant that investors received one share for every eight shares of MoneyGram. The reverse split allowed MoneyGram to reduce the number of its outstanding shares and bolster its per-share price without impacting its market capitalization. 

Article continues below advertisement

MoneyGram implemented the reverse stock split after its stock price fell to as low as $1.99. The major stock exchanges require a certain minimum stock price to maintain the listing. Some large investors, like mutual funds, may require a certain minimum price for the stocks they purchase.

moneygram international
Source: istock
Article continues below advertisement

How to buy MoneyGram stock

Since MoneyGram doesn't offer a direct stock purchase plan, you will need to open a brokerage account to buy the stock. After setting up the account, you will fund it, choose the number of MoneyGram shares you want to purchase, and then place your order. 

Online brokerages like Robinhood, SoFi Invest, and Cash App Investing allow investors to buy and sell stocks without charging a commission fee. They let investors purchase fractional shares from as little as $1. 

You can also buy MoneyGram stock indirectly through ETFs and mutual funds with exposure to the company. However, ETFs and mutual funds charge their investors an annual fee called an expense ratio. You may also incur a load fee when buying or selling mutual fund shares. Some mutual funds have minimum investment amount requirements, which could range from $1,000 to $1 million.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.