Shares of the XRP treasury company swung between $16.39 and $19.39 and were near $16.89 by mid-afternoon, about 60% above the SPAC redemption price. XRP slipped about 5% below the reference price used at closing.
Evernorth Holdings' first session as a public XRP treasury company was volatile, and the token it holds moved against it.
The shares, trading under the symbol XRPN, ranged from $16.39 to $19.39 on Monday, a spread of about 18% from low to high. They were near $17.38 at about 1:50 p.m. Eastern, up about 1.7% from the $17.09 Friday close of Armada Acquisition Corp. II, the blank-check company Evernorth merged with. By about 3:15 p.m. they had slipped to about $16.89, down about 1.1% on the day. Roughly 1.07 million shares had traded by early afternoon.
The redemption gap
Holders of about 80% of the SPAC's eligible shares redeemed them at about $10.58 each in connection with the deal, taking back about $195 million. At the mid-afternoon price, the shares trade about 60% above the cash those holders could have taken. Buyers today are paying that premium over the SPAC's trust value.
The token
XRP fell about 3.4% on Monday to near $1.36. The deal used an XRP price of $1.43069 at closing, a three-day average of a benchmark rate, to set share counts for deal investors. XRP is now about 4.8% below that reference.
Evernorth holds about 473 million XRP. At Monday's price that is worth about $644 million, down from about $677 million at the closing reference price.
Control and management
SBI Holdings, the Japanese financial group, held 39.9% of Evernorth's voting Class A shares at closing, according to its filing. The company has named Hugo Jeandesboz, a former investment executive at Coinbase, as chief investment officer.
Market implications
One reading is that the premium to the SPAC's cash value reflects demand for a listed, regulated way to own XRP, along with expectations that the company will add tokens over time, as other treasury companies have done with bitcoin and ether.
A second reading is that the premium is fragile. Most SPAC holders chose cash, the token is below the deal's reference price, the stock slipped below Friday's close during the afternoon, and other crypto treasury companies have seen their premiums shrink sharply as buying slowed.
What to watch
Evernorth's first full share count, which will allow investors to calculate the value of XRP per share, and its first disclosure of additional purchases will show whether the premium holds. The company is scheduled to ring Nasdaq's closing bell on Wednesday.