Twenty One Capital ended the quarter with over 40,000 Bitcoin and $102.8 million in cash.
- Twenty One Capital CEO Raphael Zagury also said he did not want the company’s success to rest on predicting markets.
- Zagury also said the company could buy back its own stock, but no buyback has been announced yet.
- The company reported net income of $1.087 billion for its third quarter which ended on September 30.
Twenty One Capital (XXI) CEO Raphael Zagury told shareholders that the company needed to build a real business around its Bitcoin (BTC) holdings, adding that ‘Bitcoin remains our benchmark.’ The company’s profit from Bitcoin alone stood at a little over $1 billion in its third quarter.
In a shareholder letter, Zagury explained that “A balance sheet is not a business. It is our starting point.” The company reported net income of $1.087 billion for the quarter that ended on September 30. Zagury said that result was “primarily driven by a $1.093 billion fair-value gain” on its Bitcoin, “rather than operating cash flow.”
“We welcome Bitcoin’s appreciation. But gains from an asset we own are not the same as earnings from businesses we operate,” he wrote, adding that, “Building the latter is our job.”
XXI stock was down over 1% during overnight trading. On Stocktwits, retail sentiment around XXI remained in the ‘bullish’ zone, while chatter around it shifted to ‘normal’ from ‘low’ levels over the past day.
Bitcoin As The Benchmark
Twenty One ended the September quarter with 43,514 BTC, valued at about $83,700 per coin, and $102.8 million in cash. It had $486.5 million in convertible notes outstanding, secured by about 16,116 BTC. Zagury said Bitcoin was the bar any new investment had to clear.
Any capital the company deployed “should justify the risk, complexity, and opportunity cost of not simply owning more Bitcoin,” he wrote. The company was looking at deals in mining, lending and energy, according to the letter. Zagury said it has already walked away from some of them and expected to walk away from more.
Bitcoin’s price was trading at $67,094, down over 2% in the last 24 hours. On Stocktwits, Bitcoin was one of the top trending tickers among cryptocurrencies at the time of writing.
Retail sentiment around BTCnearly 70% remained in the ‘extremely bearish’ zone, while chatter around it stayed at ‘high’ levels over the past day.
Buybacks On The Table
Zagury also said the company could buy back its own stock. “When our shares trade below the value of the assets attributable to them, repurchases deserve serious consideration,” he wrote, adding that any repurchase would be subject to liquidity, approvals and applicable restrictions.
No buyback has been announced. The letter lists repurchasing shares alongside buying Bitcoin, acquiring businesses and preserving liquidity as competing uses of the company’s capital.
Zagury said he did not want the company’s success to rest on predicting markets. “I would rather build one that can endure when we are wrong, take advantage of opportunities when they appear, and continue creating value through different market environments,” the CEO added.
XXI’s share price has been down over 43% so far this year and nearly 70% in the last 12 months.
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