By the global largest stablecoin issuer Tether directly investing in Bitcoin, the American Bitcoin company Twenty One holds an initial asset of over 42,000 Bitcoin (BTC). The blank check company Cantor Equity Partners Inc. (stock code CEP) has seen its stock price rise by 197% since the close on April 22. Investors are eager for this latest publicly traded Bitcoin investment tool, which is expected to have a market value about three times that of its held cryptocurrency valuation.
(Tether’s ambition and blueprint behind directly investing in Bitcoin into Twenty One)
Who are the initial investors of CEP?
The American Bitcoin company Twenty One will go public through a merger with Cantor Fitzgerald’s special purpose acquisition company (SPAC) Cantor Equity Partners, led by CEO Jack Mallers, founder of Strike. The shareholder lineup includes Tether, SoftBank Group from Japan, exchange Bitfinex, and Cantor Fitzgerald.
Tether and Bitfinex will directly transfer 31,500 Bitcoins in exchange for equity in the new company. Meanwhile, SoftBank Group will purchase Bitcoin in cash through Tether, becoming the second-largest shareholder.
After the transaction is completed, Tether’s voting rights will reach 51.7%, granting it absolute control. Additionally, it will raise $585 million through private investment in public equity (PIPE) and convertible bonds.
- Convertible bonds, with a conversion price of $13 per share, raising $385 million
- Common stock PIPE, priced at $10 per share, raising $200 million
CEP will become a comprehensive Bitcoin company
Twenty One emphasizes that it is not just a Bitcoin reserve strategy company; it also plans to promote Bitcoin adoption and culture, such as producing Bitcoin-specific content and media, becoming a cultural advocate for the Bitcoin community.
In addition, Twenty One also plans to launch various “Bitcoin-native financial products,” such as Bitcoin lending and Bitcoin capital market products.
CEP’s stock price surged 197% in 3 days
Before the transaction is completed, Twenty One will be listed on the Nasdaq under the code “CEP.” After the merger is completed, it will change to the trading code “XXI.”
The proposed transaction includes the issuance of convertible bonds after the transaction closes, which will lead to a total of 370.7 million shares of common stock in the merged company, including potential dilution that may occur upon conversion of the bonds.
CEP’s stock price has surged by 197% in the past three days. Based on the current stock price, Twenty One’s fully diluted market capitalization is approximately $12 billion—far exceeding the expected value of its Bitcoin holdings of 42,000 Bitcoins, estimated at around $4 billion, indicating the fervent interest from investors.
Risk Warning
Investing in cryptocurrency carries a high level of risk, and prices can be highly volatile; you may lose all your principal. Please carefully assess the risks.