Shares of Evernorth Holdings, the Ripple-backed company that holds XRP as its main treasury asset, fell 23.5% on Tuesday after a resale prospectus registered up to 73.7 million shares for sale by existing holders. That is almost three times the 26.1 million Class A shares the company had outstanding in late October, and it puts a date on when the biggest insiders can start selling.
What the filing covers
The prospectus, dated Nov. 9, lets the selling securityholders offer up to 73,688,162 Class A shares from time to time at market or negotiated prices. Only about 19.1 million of those shares exist today as Class A stock. The rest would come from converting 31.4 million Class C shares held by the sponsor and SBI Holdings entities, from exchanging 22.95 million units of the operating company held by Ripple and a Larsen family trust, and from 239,653 sponsor warrants with an $11.50 strike price.
Evernorth will receive nothing from the sales, apart from cash paid if warrants are exercised. The company said in the filing that the registered total “substantially exceeds” its outstanding Class A shares and that “That result is intended”, because its private placement and contribution agreements require it to register shares that may only be created later.
The largest blocks belong to Arrington XRP Capital Fund, the sponsor run by Michael Arrington, with 33.8 million shares registered, Ripple Labs with 18.1 million, four SBI entities with a combined 11.8 million and the Larsen Lam Children’s Remainder Trust with 7.2 million. Smaller holders include Pantera, GSR, gumi and Payward, the parent company of Kraken.
Who is locked up, and until when
Not all of that stock can move now. Under lock-up agreements signed at the Oct. 9 closing of Evernorth’s merger with a SPAC, Ripple, the Larsen Lam trust, the sponsor, the SPAC’s former insiders and “certain Ripple affiliate investors” cannot sell until six months after closing, which points to early April 2027. The filing does not say that the private placement buyers, a group that includes SBI, Pantera, GSR and Payward, are bound by those agreements.
Ownership caps also slow the creation of new Class A shares. Conversions and exchanges are blocked if they would lift Ripple’s group above 9.9% of voting power, the stake attributed to RippleWorks above 19.9% or the SBI group above 39.9%. All three were at about those levels as of Oct. 9, according to the filing. That means much of the 73.7 million can only be converted in stages, as holders sell existing shares or the overall share count grows.
How the stock traded
The shares closed at $7.96 on Tuesday, down from $10.41 on Monday, after touching $7.385 during the session, according to Nasdaq data. Volume rose to about 1.39 million shares, close to four times Monday’s level. The Defiant also reported the slide and noted the lock-ups stay in place.
The stock closed at $16.91 on Oct. 12, its first trading day under the XRPN ticker, so it has lost more than half its value in a month. XRP has fallen too, but by less. The deal’s closing XRP reference price was $1.43069; XRP was trading near $1.06 on Binance on Wednesday, about 26% lower.
What sits behind each share
The filing says Evernorth held about 473 million XRP as of Oct. 9. That came from roughly 388.9 million XRP contributed in kind by investors and 84.4 million XRP bought with $214.1 million of private placement cash. At Wednesday’s price the stack is worth about $500 million.
Counting the 26.1 million Class A shares, the 31.4 million Class C shares and the 22.95 million exchangeable units, there are about 80.4 million economic shares. On that rough basis, each share is backed by about 5.9 XRP, or roughly $6.20, before cash, the company’s $30 million convertible note and other liabilities. Tuesday’s close still left the stock above that figure, but by a much smaller margin than in mid-October.
The pattern is familiar from other crypto treasury companies this year. Bitmine’s latest annual report showed its ether worth 27% less than it paid, and Evernorth’s own path to market, which included the SEC amendment we covered in June, was pitched as a $1 billion XRP treasury. The closing raised about $272.6 million in gross cash, after holders of 18.5 million SPAC shares redeemed for about $193.6 million.
The next markers are any Form 4 or 144 filings showing actual sales by the unlocked holders, Evernorth’s first quarterly report as a listed company, and the April lock-up expiry for Ripple and the sponsor. Evernorth’s EDGAR page is where those will appear first.
FAQ
Is Evernorth selling XRP?
No. The prospectus covers resales of Evernorth shares by existing holders. The company receives no proceeds and the filing does not describe any XRP sale.
When can Ripple sell its Evernorth shares?
Ripple, the sponsor and the Larsen Lam trust are under lock-ups that run until six months after the Oct. 9 closing, which is early April 2027, unless the company is sold or merged first.
Why are more shares registered than are outstanding?
The 73.7 million figure includes Class C shares and operating-company units that can be converted into Class A stock later, subject to ownership caps of 9.9%, 19.9% and 39.9% for different holder groups.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
