Tether Buys SoftBank Stake in Twenty One Capital

Tether acquired SoftBank’s full 89.1 million-share stake in Twenty One Capital, according to a Wednesday SEC filing. SoftBank’s Class B shares were canceled and the company said SoftBank requested the resignation of its board designees, leaving Twenty One Capital temporarily out of compliance with NYSE rules.

The filing transferred all of SoftBank’s holdings in Twenty One Capital (NYSE: XXI) to Tether. SoftBank paid $999.3 million for the position last June; recent internal valuations placed the stake near $711 million, about $7.98 per share. The filing did not disclose the transaction price.

The resignations included a partner who served on XXI’s audit committee, reducing the number of independent members below the exchange’s minimum. In its filing, XXI said it plans to appoint an audit committee member who meets NYSE requirements “as soon as practicable.” The company also confirmed the cancellation of SoftBank’s Class B shares.

Ownership records from December show Tether held a majority of Class B voting shares, about 51.3%, while SoftBank held roughly 29.2% of that class. On the Class A side, Tether and SoftBank owned about 45.1% and 25%, respectively, as of December.

Twenty One Capital holds 43,514 Bitcoin. With Bitcoin trading near $77,470 on Wednesday, the firm’s Bitcoin position was valued at about $3.4 billion, down from a peak near $5.4 billion in October. XXI’s stock rose almost 5% on the day to produce a market capitalization around $5.2 billion; the share price remains about 83% below its level a year earlier.

XXI has raised capital through preferred-stock issuance to fund Bitcoin purchases and support dividends. Investors could buy the company’s preferred product, Stretch (STRC), ahead of an ex-dividend date last week. Demand led XXI to issue nearly $2 billion worth of preferred shares, proceeds the company used for recent Bitcoin acquisitions and dividend obligations.

Paolo Ardoino, Tether’s CEO, said in a statement that SoftBank’s involvement “gave XXI the kind of institutional depth that few early-stage companies ever have” and that the firm’s backing “brought credibility.” The company has not disclosed details of any additional Bitcoin purchases beyond periodic filings that show changes in holdings.

The immediate governance issue for XXI is restoring the required number of independent audit committee members to regain NYSE compliance. Future filings will show the timing of any board appointments and the steps XXI takes to meet exchange rules.