Shares of Armada Acquisition Corp. II (XRPN), the special purpose acquisition company merging with XRP treasury enterprise Evernorth, dropped 50.3% on Tuesday to close at $19.20. The decline follows a prior close of $38.65 and comes shortly after an Oct. 6 regulatory filing revealed a short administrative delay pushing the completion of the merger to around Oct. 9 from Oct. 7.
Trading of the combined corporate entity on Nasdaq is now projected to begin around Oct. 12 rather than Oct. 8. Despite the retreat, XRPN remains roughly 81% above its Sept. 28 close of $10.58, after previously surging as high as $53 on Oct. 2 following shareholder approval on Sept. 30.
Redemption Estimates and Share Scarcity
The drastic price swings coincide with expected reductions in Armada's public float. As of June 30, Armada reported 23 million shares subject to redemption backed by $241.2 million in trust, representing $10.49 per share. However, Evernorth stated that only about $48 million in trust proceeds are anticipated to remain at closing.
This capital reduction implies that approximately 4.6 million redeemable shares will remain out of the original 23 million, pointing to an estimated redemption rate near 80%. Similar dynamics in equity vehicles showcase how restricted share availability can create exaggerated price movements before closing, a phenomenon often discussed regarding amplified volatility in treasury companies.
Treasury Scale and Institutional Backing
Upon closing, the combined entity aims to establish the largest public firm focused on an XRP corporate treasury, holding approximately 473 million XRP. The business expects gross cash proceeds of roughly $300 million, comprising $225 million from private placements, $30 million from convertible notes, and the estimated $48 million from Armada's trust before expenses.
Prominent backers listed in Evernorth's Oct. 1 announcement include Ripple, SBI Group, Arrington Capital, Pantera Capital, Kraken, and GSR. Chief Executive Asheesh Birla detailed plans to deploy capital across the XRP ecosystem to expand the firm's token exposure per share over time.
Key Takeaways
- XRPN stock sank 50.3% to $19.20 following a peak of $53 on Oct. 2.
- Evernorth rescheduled its Nasdaq debut to approximately Oct. 12 after an administrative delay pushed completion to Oct. 9.
- An estimated 80% redemption rate leaves approximately $48 million in trust proceeds out of an initial $241.2 million.
- The vehicle will control 473 million XRP alongside $300 million in gross cash proceeds at deal completion.
Why It Matters
This dramatic drop demonstrates the structural friction and volatility surrounding SPAC transactions before final redemption figures are confirmed. While Evernorth intends to operate as a premier corporate wrapper for XRP exposure, low float dynamics can severely decouple pre-merger stock prices from underlying asset values. Investors will closely watch post-closing disclosures to determine whether Evernorth's long-term market capitalization accurately reflects its 473 million XRP holdings and treasury yield strategy.
