Evernorth lines up $80M from Cantor to buy more XRP

Evernorth Holdings, the Nasdaq-listed XRP treasury company backed by Ripple, has signed an equity financing deal with a Cantor Fitzgerald affiliate that could raise about $80 million, most of which it plans to spend on more XRP, CryptoSlate reports, citing the company's SEC filings. It is the latest step for a firm we covered when it hired Ripple, Kraken, Coinbase and BitGo to put its XRP treasury to work.

How the deal works

• Counterparty: CF Principal Investments, part of Cantor Fitzgerald. The stock purchase agreement was signed on 23 October.
• Size: up to 5.22 million newly issued Class A shares over about 14 months.
• Expected proceeds: about $80.7 million gross, or $78.3 million after fees, based on the $15.46 closing price on 22 October, according to the prospectus.
• Pricing: Evernorth decides when to sell, and Cantor buys at 97% of the volume-weighted average price.
• Limits: purchases are generally capped at 20% of trading volume in each period, and Cantor may not own more than 4.99% of the company. Evernorth owes a commitment fee of about $522,000, which can rise to $1 million.
• Not started yet: the SEC must first declare Evernorth's resale registration statement effective, and other conditions must be met.

The company says a substantial share of the money will go to buying XRP, with the rest for working capital, corporate costs and XRP ecosystem activity.

Warrants as a second source

In a separate filing, Evernorth registered almost 11.5 million Class A shares that can be issued when holders exercise public warrants, a leftover from the SPAC merger that took it public. The warrants have an $11.50 strike, and full cash exercise would bring in about $132.2 million. Unlike the Cantor line, that money depends on warrant holders choosing to exercise, and it would go to general corporate purposes.

The Strategy playbook, applied to XRP

Evernorth says it generally plans to raise capital when its shares trade at a premium to the value of its XRP holdings, so that each sale adds more XRP per share. It is the model Strategy used to build its bitcoin pile, and its limits are familiar: new shares dilute existing holders, and the approach works only while that premium lasts, as our look at Strategy's balancing act between dividends and bitcoin buys shows. How much XRP Evernorth ends up buying will depend on its share price and trading liquidity. New to the token itself? Start with what XRP is.