Twenty One Capital Stock Trades Below Its Bitcoin Value

Twenty One Capital chief executive Rapha Zagury addressed critics in his first shareholder letter, admitting the market values the company at less than the Bitcoin it owns. The firm holds 43,514 Bitcoin worth roughly $2.8 billion, yet the entire company trades for about $1.6 billion. This means buyers pay around 57 cents for every dollar of Bitcoin inside the company.

The massive discount comes alongside a painful second quarter loss of $413.5 million. Bitcoin prices fell sharply during the period, erasing hundreds of millions in value. The company currently earns no revenue, holds $106.1 million in cash against $484.5 million in convertible notes, and has over a third of its coin stack locked as collateral for debt. The stock trades near $4.53, down roughly 85% from its 52 week high.

To fix the problem, Zagury plans to borrow from the Berkshire Hathaway playbook by building cash earning businesses around a strong balance sheet. The five new priorities include better governance, operating businesses, capital market tools, mergers and acquisitions, and low debt lending backed by Bitcoin. Tether took full control of the firm in May, and management promised a fuller strategy update before the end of the year.