Bitcoin Firm Twenty One Falls 24% After Cantor Equity Merger

Shares of Twenty One Capital Inc. fell 24% in its trading debut Tuesday, after it merged with special-purpose acquisition company Cantor Equity Partners Inc. to become the latest public crypto company.

Shares of the Austin, Texas-based Bitcoin treasury company opened at $10.74 each on Tuesday, below the Cantor SPAC’s closing price of $14.27. The stock traded at $10.89 as of 10:39 a.m. in New York, giving the firm a market value of about $3.8 billion based on shares outstanding listed in a filing.

Twenty One was launched by an affiliate of Cantor Fitzgerald LP, stablecoin issuer Tether Holdings SA and SoftBank Group as a Bitcoin company. Brandon Lutnick, chairman of Cantor Fitzgerald and the son of US Secretary of Commerce Howard Lutnick, is chief executive officer of Cantor Equity Partners. Jack Mallers, the founder and chief executive officer of Strike, a digital-payments provider on Bitcoin’s Lightning Network, is CEO of Twenty One Capital.

Twenty One holds around $3.9 billion in Bitcoin — a sum higher than the company’s current valuation — as the company joins droves of digital asset treasury companies following the model Michael Saylor created at Strategy Inc. In addition to holding Bitcoin, Twenty One plans to work on financial infrastructure for the cryptocurrency and plans to create media and educational resources about Bitcoin.

Twenty One will be majority-owned by Tether and Bitfinex, with significant minority investment from SoftBank, according to a statement.

The company is going public at a difficult time for the crypto industry. Bitcoin prices have fallen over 28% from their peak earlier this year and crypto IPOs have seen mixed results. ProCap Financial Inc. another de-SPAC Bitcoin treasury, saw its shares fall 14% on its first trading day Monday.

Digital asset treasury companies have also seen large declines this year amid lower token prices, increased competition and shrinking premiums. However Twenty One said it’s not trying to directly follow the Strategy playbook.

“Our treasury is not trading at any premium to net-asset value. So we believe it’s a very attractive vehicle for those that are looking for Bitcoin exposure and we think it can be one of, if not the, winner of this trend,” Mallers told Bloomberg in April.

The merger between Cantor Equity and Twenty One included private investment in public equity transactions with $486.5 million senior convertible notes and around $365 million of common equity. Cantor Fitzgerald was the placement agent for the transactions.

Twenty One trades on the the New York Stock Exchange under the symbol XXI.