Armada Acquisition Corp. II, the SPAC taking XRP treasury firm Evernorth public, surged nearly 270% over the past week. The rally pushed Armada shares to nearly four times their initial trust value of around $10.50, right before the merger between the two companies is finalized.
Evernorth confirmed that the business combination is scheduled to close on Wednesday, October 7, subject to remaining closing conditions. If all conditions are met, the newly combined entity will begin trading on the Nasdaq exchange on Thursday, October 8. Ripple is directly listed as one of Evernorth’s shareholders, backing the company’s move onto the public market.
80 Percent Redemption Risk
Behind the surge on the stock exchange, shareholders are set to redeem roughly 80% of the initial trust funds, according to CoinDesk calculations. A redemption rate of that magnitude leaves a very small public float available to trade on the open market. This thin float could potentially amplify price volatility once official trading begins.
Evernorth’s balance sheet is also bearing the brunt of crypto market movements. A portion of the XRP reserves purchased by the company with cash is now valued well below its initial acquisition cost.
Grim Track Record of Crypto Treasury Stocks
The history of its predecessors offers a clear warning to investors. Other crypto holding companies that ventured onto public exchanges have struggled to sustain their share prices following their mergers. Twenty One, a similar entity backed by stablecoin issuer Tether, tumbled 25% on its debut day on the New York Stock Exchange. Shares of ProCap BTC dropped even more steeply, shedding over 60% since completing their merger.
For prospective public market buyers, Evernorth’s Nasdaq debut this week tests whether the XRP narrative can defy the downward trend in crypto treasury stocks, or if it will merely extend the string of losses for retail investors on the exchange. Reported by CoinDesk.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
