Twenty One's New CEO Lists Five Priorities, Buying Bitcoin Is Not One

Raphael Zagury, three weeks into the job, used a shareholder letter released on 11 Aug alongside the company's second-quarter results to describe a company focused on acquisitions, a lending arm and the buying and building of operating businesses, with Berkshire Hathaway as the model. He has separately called the vision "a Bitcoin operating company" rather than a treasury vehicle. The NYSE-listed company's controlling shareholder is Tether, the stablecoin issuer, which held 45% of the Class A shares and a majority of the voting Class B stock as of the ownership table filed on 30 Mar. In May it acquired SoftBank's 26% Class A stake, and SoftBank's 89mn Class B shares were cancelled under the company's certificate of formation, cutting the voting class from 305mn shares to 216mn and concentrating control further.

The results give the pivot its context. Twenty One reported no revenue for the second quarter or the first half. Its net loss was $414mn for the quarter and $1.27bn for the six months, driven overwhelmingly by a $1.2bn fall in the fair value of its Bitcoin. Operating expenses were $10.7mn for the quarter against $10.5mn in the first, and cash fell to $106mn at 30 Jun from $118mn at 31 Dec.

A treasury company that stopped buying

The clearest number in the filing is the one that did not move. Twenty One held 43,514 Bitcoin at 30 Jun, one coin fewer than the 43,515 it held at 31 Dec. The treasury is marked at $2.6bn against $3.8bn at the start of the year, a decline entirely attributable to price.

Roughly 16,100 of those coins, worth $944mn at the quarter-end mark, are pledged against $487mn of convertible notes and in the filing's words "cannot be used as a source of liquidity for the Company."

The gap between the Bitcoin and the equity is wide. Twenty One reported 12,547 satoshis of Bitcoin per share at 30 Jun which, at its own quarter-end mark of $58,605, is worth $7.35. The stock closed the quarter at $4.95, a discount of 33%. The measure counts only Class A shares because the Class B stock carries no economic rights and is not entitled to dividends or distributions. Shares closed at $4.50 on 11 Aug, the day the results and the letter both landed, down 1.7% on the session, according to TradingView.

Zagury addressed the discount directly. "In the short time I've been CEO, some of your initial feedback has been blunt," he wrote, adding that the gap could be viewed as a misallocation of capital, a view he said he shared.

He had questioned the model before taking the job. Two days after his appointment, Zagury told the Mining Disrupt conference in Miami that "risk was definitely mispriced in the asset class," and that treasury companies were a dislocation rather than a permanent feature, according to a transcript the company furnished to the US Securities and Exchange Commission (SEC). "It's obvious that if everybody does that, at some point it's gonna converge back, you know, towards 1 mNAV," he said, referring to a share price equal to the net asset value of the holdings. "There's no free money forever."

The CEO is on both sides of the deal

The letter names neither Strike nor Elektron Energy, the two companies at the centre of a three-way combination announced in April and abandoned in July.

Strike, the Bitcoin financial services firm founded by Jack Mallers, went when Mallers did. Elektron is more complicated. It is a Bitcoin mining business founded by Zagury, who is also founder and CEO of Elektron Enterprises LLC, the entity that manages it. A risk factor in the quarterly report discloses that Zagury "may have a material financial interest" in an Elektron transaction "that may differ from the interests of our shareholders," and states that the board has not evaluated or approved any such deal.

Mallers had presented Elektron on stage at the Bitcoin 2026 conference as "Tether's Bitcoin infrastructure, mining business," later describing his remarks as commentary on "Tether's proposed plan." Twenty One classified Zagury in a 12 Mar filing as one of four "Tether Affiliate Group Directors" alongside Tether CEO Paolo Ardoino. The accompanying April press release promised further detail on terms, timing and governance as discussions progressed. None has been published.

So an acquisition-led strategy has been proposed at a company Tether controls, by a CEO who separately controls a business Twenty One was until recently proposing to buy and which has itself been described as Tether's.

The metric that would look worse

Bitcoin per share necessarily falls whenever the treasury is spent. That is an awkward headline measure for a company planning to spend it.

At Mining Disrupt, Zagury said leadership had been debating "what are the right KPIs in this industry" and that he kept coming back to shareholder value in Bitcoin terms. The quarterly report still leads on Bitcoin per share, down from 12,557 satoshis at 31 Dec to 12,547 at 30 Jun, a fall of about 0.1%. A satoshi is one hundred-millionth of a Bitcoin.

Measured the other way, the picture is worse. On Sandmark's calculation, dividing the share price by the Bitcoin mark, a share was worth 10,365 satoshis at 31 Dec, taking the year-end Bitcoin price of $87,316 against a $9.05 close. By 30 Jun, with Bitcoin at $58,605 and the stock at $4.95, that had fallen to 8,446, a decline of 19%. Zagury has not defined the metric he favours, so this is one reading of it rather than the company's.

His argument is that spending the treasury on cash-generating businesses can raise returns even as coins per share falls. "Your treasury may go down because you're switching some of your Bitcoin to a company that can perform better," he said. "But your overall chance of actually getting more return on your capital, on a Bitcoin basis, increased substantially."

The filing has not caught up with the letter. The 10-Q still describes accumulation as the company's first principal activity and says the strategy involves acquiring bitcoin "from initial investments, debt and equity financings, and operating cash flows in excess of operating expenses." It retains the language that Twenty One "expects to allocate the majority of its available treasury capital into Bitcoin over time." Zagury told shareholders the buildout "cannot mean a year of waiting" and promised a fuller update later in 2026.

Twenty One Capital was approached for comment.