The XRP Stock That Exploded Nearly 300% — What Is Evernorth?

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Welcome back to the Daily Crypto Deep Dive. There is a stock connected to XRP that has just gone absolutely berserk. In the space of roughly one week, shares in Armada Acquisition Corp. II, ticker XRPN, went from around $10.58 to close Friday at $39.42, having traded as high as about $53.

That is a gain of roughly 273% in a week. What makes this particularly strange is that the company investors are really trying to get exposure to. Evernorth has not even fully completed its merger yet. The deal is expected to close on October 7th, with the combined Evernorth business expected to begin trading on NASDAQ shortly afterwards under the XRPN ticker. So today I want to explain this whole thing from the very beginning, because there are several moving parts here. We need to understand what XRPN actually is, what Evernorth is, what a SPAC is, why Evernorth wants to own hundreds of millions of XRP, why Ripple is involved, and why investors have suddenly been willing to pay such an enormous amount for these shares. Let us start with Evernorth itself. Evernorth is being built as what is known as an XRP treasury company. That sounds more complicated than it really is. Imagine creating a normal publicly traded company that people can buy shares in through a stockbroker. But instead of the company mainly selling products or operating factories, one of its central purposes is to own a huge pile of XRP.

Evernorth expects to hold somewhere in the region of 473 million XRP. At current prices, that represents hundreds of millions of dollars worth of XRP sitting on the company's balance sheet. The basic proposition to investors is therefore fairly straightforward. Instead of going to a crypto exchange and buying XRP directly, an investor could potentially buy shares in Evernorth and gain exposure to a company whose value is heavily linked to XRP. This type of model is not completely new. The most famous example is Strategy, formerly known as MicroStrategy, which spent years raising money and using much of it to buy Bitcoin. Strategy became, effectively, a giant publicly traded Bitcoin treasury vehicle. Investors bought its shares partly because they wanted exposure to Bitcoin through a normal stock market account. That model became extraordinarily successful during periods when Bitcoin prices were rising and Strategy's shares were trading at a premium to the value of the Bitcoin it owned. The company could issue shares at high valuations, raise more money, buy more Bitcoin, and potentially increase the amount of Bitcoin backing each share. That financial engineering became an important part of the investment case. Evernorth is attempting something conceptually similar with XRP.

It wants to build a large XRP treasury and then use a publicly traded company structure to potentially expand that treasury over time. That is why this story is so important for XRP holders. If the model works, Evernorth could eventually become one of the largest institutional holders of XRP in the world. But before we get carried away with that, we need to explain XRPN, because right now investors are not technically buying the final Evernorth company. XRPN currently refers to Armada Acquisition Corp. II, which is what is known as a SPAC. SPAC stands for Special Purpose Acquisition Company. A SPAC is essentially a company created with no major operating business of its own. It raises money from investors and lists on a stock exchange with the intention of finding another private company to merge with. Once it completes that merger, the private company effectively becomes publicly traded without going through the traditional IPO process.

A simple way of thinking about it is that a SPAC is an empty stock market shell containing cash. Investors put money into it, usually around $10 per share, and the management team goes looking for a business to acquire. If shareholders approve the deal, the private business merges into the shell and becomes publicly listed. That is exactly what is happening here. Armada Acquisition Corp. II is the SPAC. Evernorth is the business it intends to combine with. Once the transaction completes, Evernorth effectively becomes the company behind the XRPN stock market ticker. And this is where things become very interesting, because SPAC shares normally start life around $10.

That $10 is not an arbitrary figure. When investors originally put money into the SPAC, much of that money is held in a trust account. Shareholders are normally entitled to redeem their shares and receive approximately their portion of that cash back if they do not want to participate in the eventual merger. So if there is roughly $10 of cash backing each SPAC share and the shares are trading around $10, nothing particularly unusual is happening. But XRPN recently rose to almost $40 and at one stage traded above $50.