On its inaugural day of trading on the New York Stock Exchange, Twenty One Capital (XXI) experienced a significant decline, falling 20% to close at $11.42. This drop occurred even as Bitcoin appreciated by 3%, creating a notable disconnection between the company”s performance and the asset it holds.
The firm holds a substantial portfolio of 43,514 Bitcoin, valued at over $4 billion, making it the third-largest public corporate holder of Bitcoin after MARA Holdings and Strategy. The stock opened at $10.74, considerably lower than the previous closing price of $14.27 for Cantor Equity Partners, the special purpose acquisition company (SPAC) it merged with.
Despite the initial downturn, shares saw a slight recovery during after-hours trading, rising by 2.2% to $11.67, which brings the company”s market capitalization to approximately $4 billion based on outstanding shares. This public offering was highly anticipated, especially given the current state of the cryptocurrency market.
CEO Jack Mallers, who is also the founder of the Bitcoin platform Strike, emphasized that Twenty One Capital aims to be more than just a treasury company. He outlined plans to develop revenue-generating businesses in areas such as brokerage, credit, and lending. Mallers raised concerns about the lack of clarity surrounding the company”s operational plans, which may have contributed to investor apprehension on its debut day.
In a recent interview, Mallers reiterated that Twenty One Capital is not merely a treasury company and seeks to avoid being valued solely as a treasury asset. He stated that the company is in the process of building an operational business model that will focus on launching Bitcoin-based products aimed at generating cash flow.
With backing from major players like Tether, Bitfinex, and SoftBank, the firm has successfully raised $850 million through a combination of convertible notes and equity sales. Mallers expressed confidence that the company”s track record and the backing of established entities will help navigate the challenges posed by the current crypto market climate.
As the market for crypto treasury companies continues to evolve, Twenty One Capital”s strategy to merge Bitcoin accumulation with operational revenue generation sets it apart from other firms in the sector. The company aims to strategically position itself by focusing exclusively on Bitcoin while developing business activities that enhance shareholder value.
