Shares of Armada Acquisition Corp. II, trading under ticker XRPN, closed Tuesday at $19.20, down 50.3% from $38.65 the previous day. The sharp decline prompted Evernorth to delay its Nasdaq debut by several days, with trading of the combined company now expected to begin around October 12 instead of October 8.
In an October 6 filing, Evernorth cited an administrative delay in completing its merger with Armada, pushing the anticipated closing date from October 7 to around October 9. The company said the delay is not expected to affect the transaction's completion.
Rapid Rally and Reversal
The stock had climbed sharply in recent days. XRPN closed at $23.43 on October 1, surged to as high as $53 on October 2, and finished that session at $39.42. It remained relatively stable at $38.65 on October 5 before the steep decline Tuesday.
The rally accelerated after Armada shareholders approved the Evernorth transaction on September 30. Even after losing half its value, the stock remained approximately 81% above its September 28 close of $10.58, reflecting the magnitude of the preceding advance.
Share Supply and Redemptions
The extreme volatility may be partly driven by the shrinking pool of Armada shares available to investors. Armada reported 23 million shares subject to redemption at June 30, backed by $241.2 million in its trust account. Evernorth subsequently disclosed that only about $48 million of trust proceeds are expected to remain for the combined company when the transaction closes.
Using June redemption values as a reference point, the remaining trust proceeds would correspond to approximately 4.6 million shares from the original 23 million redeemable shares, suggesting redemptions approaching 80%. The companies have not yet disclosed the final redemption count.
Heavy SPAC redemptions can leave few shares available for trading, which can amplify price movements when investor demand spikes and produces equally sharp reversals when it fades.
Evernorth's XRP Strategy
Evernorth expects to hold approximately 473 million XRP at closing, along with roughly $300 million in gross cash proceeds from the transaction. This includes $225 million from private placements, $30 million from convertible-note financing, and approximately $48 million remaining from Armada's trust before transaction expenses.
Investors backing the transaction include Ripple, SBI Group, Arrington Capital, Pantera Capital, Kraken, and GSR. Evernorth Chief Executive Asheesh Birla stated the company plans to deploy capital across the XRP ecosystem to increase XRP exposure per share over time.
Once the merger closes, final disclosures regarding the redemption count, cash from Armada's trust, and the combined company's share structure should provide investors with a firmer basis for evaluating the investment.
