Shares of crypto treasury firm Twenty One Capital tumbled 24% in their trading debut on Tuesday, after the company completed its merger with the special-purpose acquisition company Cantor Equity Partners Inc.
The sharp drop comes at a time when crypto-related stocks are already facing mounting pressure. With this merger, the combined company became the latest publicly listed crypto company and is now trading under the ticker “XXI” on New York Stock Exchange (NYSE).
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. It is currently trading at $11.02 on Tuesday, 9 December, as of 12:12 PM EST.
A special-purpose acquisition company is also known as a “blank-cheque company”, which is formed only to raise money and buy or merge with another company.
Who backs Twenty One?
A major part of Twenty One is collectively owned by stablecoin giant Tether and crypto exchange Bitfinex, with Japanese technology investor SoftBank Group holding a minority stake in the firm.
This merger between Twenty One and Cantor Equity Partners (CEP.O) was first announced in April.
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 the 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 the CEO of Twenty One Capital.
Twenty One currently holds around $3.9 billion worth of Bitcoin, a sum that already exceeds the company’s current valuation, according to Bloomberg.
Did it go public at the wrong time?
The company has gone public at a challenging time for the crypto industry. Bitcoin prices have slipped more than 28% from their peak earlier this year and crypto IPOs have delivered mixed results, according to Bloomberg.
Digital asset treasury companies have also suffered steep declines this year, pressured by lower token prices, intensifying competition and shrinking premiums.
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 served as the placement agent for the deal, according to Bloomberg.