21 Capital Manus Research - Share Dilution
Major Share Dilution Alert 🚨
Current Structure:
- CEP currently has ~10 million shares outstanding
- Current Bitcoin holdings: 37,230 BTC
Post-Merger Structure:
- Total diluted share count: 370.7 million shares
- This represents a 37x increase in share count!
Ownership Breakdown After Merger:
- Public SPAC shareholders: Only 2.7% of outstanding shares
- Tether: 43%
- SoftBank: 24%
- Bitfinex: 16%
- Cantor affiliates: 1.9%
- Others: ~12.4%
Impact on Bitcoin Per Share (BPS)
Before Merger:
- ~37,230 BTC ÷ 10M shares = ~3.72 BTC per 1,000 shares
After Merger:
- ~37,230 BTC ÷ 370.7M shares = ~0.10 BTC per 1,000 shares
This represents a 97% dilution of Bitcoin holdings per share!
Revised Investment Analysis
This changes the investment thesis significantly:
The "Discount to NAV" is misleading - while the current market cap appears to trade at a discount to Bitcoin holdings, this doesn't account for the massive dilution that existing shareholders will face.
For current CEP shareholders:
- Your percentage ownership of the Bitcoin will be dramatically reduced
- The apparent "value" is largely going to new institutional investors
- This explains why the stock has been declining despite Bitcoin strength
Bottom Line: The merger structure heavily favors institutional investors at the expense of current public shareholders. This is a critical risk factor that wasn't fully apparent in the initial analysis.