Twenty One Capital (XXI) Stock: Jack Mallers’ Company Falls 20% in First Day of NYSE Trading

TLDR

• Twenty One Capital (XXI) dropped 20% on its first day of trading Tuesday, closing at $11.42 despite Bitcoin rising 3%
• The company holds 43,514 Bitcoin worth over $4 billion, ranking third among public corporate holders
• CEO Jack Mallers stated Twenty One is not just a treasury company and plans to build revenue-generating businesses in brokerage, credit, and lending
• The firm raised $850 million through convertible notes and equity sales, backed by Tether, SoftBank, and Bitfinex
• Shares opened at $10.74, well below Monday’s SPAC closing price of $14.27 for Cantor Equity Partners

Twenty One Capital shares tumbled on their first day of trading Tuesday, closing 20% below the previous day’s merger price. The Bitcoin-focused company opened at $10.74 and finished at $11.42, falling short of the $14.27 closing price for Cantor Equity Partners, the SPAC it merged with.

The stock saw a slight recovery in after-hours trading, climbing 2.2% to $11.67. This gives the company a market value of approximately $4 billion based on outstanding shares.

The debut came as Bitcoin itself climbed roughly 3%, creating a disconnect between the company’s performance and the asset it holds. Twenty One Capital ranks as one of the most anticipated crypto public offerings this year.

The company enters the market with 43,514 Bitcoin worth over $4.05 billion. This positions Twenty One as the third-largest public corporate holder of Bitcoin, trailing only MARA Holdings and Strategy.

Tether, Bitfinex, and Japan’s SoftBank Group back the venture. Jack Mallers, founder and CEO of Bitcoin platform Strike, leads the company as CEO.

The SPAC deal brought in roughly $850 million through convertible notes and equity sales. The capital package included earlier Bitcoin contributions from Tether, SoftBank, and Bitfinex worth several billion dollars.

Business Model Under Scrutiny

Twenty One Capital has not publicly detailed its operating business plans or launch timeline. This lack of clarity appears to have spooked some investors on debut day.

Mallers told CNBC the company is “not a treasury company” and wants to avoid being priced purely as a treasury asset. He stressed Twenty One is building an operating business with plans to launch Bitcoin products that generate cash flow.

He drew distinctions between Twenty One and other market players. Mallers noted Coinbase operates as a crypto business rather than Bitcoin-only, while Strategy holds Bitcoin but lacks products or cash flow in the industry.

Market Context and Positioning

The US market has seen multiple crypto treasury companies launch this year. These firms follow a model popularized by Strategy, buying and holding crypto while raising money for additional purchases.

Investor interest in crypto holding companies peaked earlier this year as Bitcoin climbed to October highs. The recent decline in crypto markets has dragged down shares of companies exposed to the sector.

The CEO positioned Bitcoin as the primary opportunity and stated Twenty One will focus solely on Bitcoin to deliver shareholder value. The company aims to differentiate itself through this singular focus combined with operating businesses.

Shares edged up to $11.80 in post-market trading following the Tuesday debut.

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