Twenty One – New Kid On The Block

Twenty One To Mirror Strategy

Twenty One (XXI) is a new bitcoin-only company that will follow the Strategy (MSTR) playbook.

Jack Mallers, currently CEO of Strike, will be the CEO of the new company, and Jack will be the CEO of both companies simultaneously.

The majority investor will be Tether, and the minority investor will be SoftBank.

The company will go public via an SPAC merger with Cantor Equity Partners (CEP), which is run by Brandon Lutnick, the son of the U.S. Commerce Secretary, Howard Lutnick, and the previous CEO at Cantor Fitzgerald.

At first sight, it is an imposing group of individuals and institutions, all of whom bring significant experience and resources to the table.

Bitcoin Acquisition

Twenty One will issue various forms of debt and equity and use the proceeds to buy bitcoin for their balance sheet.

The prospectus indicates that the company is targeting $585 million of total financing, which breaks down into $385 million of convertible debt and $200 million of equity.

Investors will be able to purchase equity at approximately 1x multiple of Bitcoin Net Asset Value (NAV). That is a departure from the model of other companies that pursue a bitcoin treasury strategy. As an example, strategy trades at a premium of 2x to NAV.

Twenty One will start with a bitcoin holding of 42,000, making it the third-highest bitcoin holder behind MARA Holdings and Strategy.

Twenty One Education And Finance

Alongside the bitcoin accumulation and management strategy, Twenty One will engage in a range of Bitcoin-related activities, including education, branding, and financing, to generate earnings.

They aim to use educational content to accelerate Bitcoin adoption and literacy at both institutional and retail levels.

In addition, the company will offer Bitcoin-related financial advisory services alongside debt and equity products and lending.

While Twenty One will not be a good fit for all investors, they are a welcome addition to the growing ranks promoting global bitcoin adoption.