Twenty One Capital Sees Surge in Shares Following Proposed Merger by Majority Holder Tether

Shares of Twenty One Capital, a firm focused on bitcoin, have risen by over 8% in after-hours trading on Wednesday following a proposal by majority shareholder Tether Investments for a three-way merger with Strike and Elektron Energy. Tether Investment, the independent investment arm of the stablecoin issuer, has expressed its intention to vote in favor of combining Twenty One Capital with Strike, a global bitcoin financial services company founded by Jack Mallers, and Elektron Energy, as stated in a press release.

Mallers also serves as the CEO of Twenty One Capital. According to the press release, "upon completion, these transactions would position Twenty One Capital to become the world's premier listed Bitcoin company, integrating bitcoin treasury, mining, financial services, lending, capital markets, and strategic consolidation into one platform." The terms and timeline of the merger have not been disclosed.

Elektron Energy, led by Raphael Zagury, currently manages around 5% of the bitcoin network's computing power, with production costs below $60,000 per bitcoin. Tether has also proposed that Zagury take on the role of President of the combined entity, pairing his experience in mining and capital markets with Mallers' expertise in product and consumer bitcoin services. After going public in December through a SPAC merger with Cantor Equity Partners, Twenty One Capital entered the market as a bitcoin treasury firm with 43,514 BTC, backed by Tether, Bitfinex, and Strike CEO Jack Mallers, with a focus on "capital-efficient bitcoin accumulation." If the proposed merger takes place, the company will expand its services beyond treasury exposure to include operating businesses, recurring revenue opportunities, and long-term bitcoin accumulation capabilities, as stated in the press release.

The statement added that "the combined transactions would transition Twenty One Capital beyond sole treasury exposure toward a platform with operating businesses, recurring revenue streams, and enhanced long-term bitcoin accumulation capabilities."