Twenty One Capital (XXI) Stock: Drops 20% on NYSE Launch Despite $4B Bitcoin Holdings

TLDR

• XXI shares fell 20% in trading debut, closing at $11.42 versus $14.27 SPAC merger price
• Company holds 43,514 Bitcoin valued at $4+ billion, third-largest public holder
• CEO Jack Mallers promises revenue-generating businesses in brokerage, credit, and lending
• Tether, SoftBank, and Bitfinex backed the venture with $850M in capital
• Stock recovered slightly to $11.80 in after-hours trading

Twenty One Capital made a rocky entrance to public markets Tuesday. Shares closed at $11.42, down 20% from the $14.27 closing price of Cantor Equity Partners, the SPAC it merged with.

The Bitcoin-focused company opened trading at $10.74. This marked a disappointing debut for one of the year’s most watched crypto offerings.

Bitcoin itself rose 3% on the same day. The disconnect between the cryptocurrency’s performance and XXI’s stock price raised questions about investor confidence.

The company enters public markets holding 43,514 Bitcoin worth over $4 billion. This positions Twenty One as the third-largest public corporate Bitcoin holder behind MARA Holdings and Strategy.

Strike founder Jack Mallers serves as CEO. Major backers include stablecoin issuer Tether, crypto exchange Bitfinex, and Japan’s SoftBank Group.

Unclear Business Plans Spook Investors

Twenty One has not revealed specific operating plans or timelines. This lack of detail appears to have contributed to the first-day selloff.

The CEO outlined plans to build revenue-generating Bitcoin businesses. Target areas include brokerage, exchange, credit, and lending operations.

Mallers distinguished Twenty One from competitors. He noted Coinbase operates across crypto, not just Bitcoin. Strategy holds Bitcoin but lacks operating products or cash flow.

Capital Structure and Market Position

The SPAC deal generated $850 million through convertible notes and equity sales. Earlier contributions from Tether, SoftBank, and Bitfinex added several billion dollars in Bitcoin when Twenty One formed last spring.

The company joins a crowded field of crypto treasury firms that launched this year. These businesses follow Strategy’s model of buying and holding crypto while raising capital for more purchases.

Shares gained slightly in after-hours trading, rising 2.2% to $11.67. This gives Twenty One a market value around $4 billion based on outstanding shares.

The CEO emphasized Twenty One will focus solely on Bitcoin to deliver shareholder value. The company aims to combine treasury holdings with active business operations.

XXI finished after-hours trading at $11.80, showing modest recovery from the day’s lows.

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