Times may feel a bit febrile, but at least we’re getting some wonderful structural diagrams.

From MainFT’s Antoine Gara and Oliver Barnes yesterday:

Brandon Lutnick, son of US commerce secretary Howard Lutnick, is partnering with SoftBank, Tether and Bitfinex on a bitcoin acquisition vehicle to capitalise on a cryptocurrency revival under US President Donald Trump.

The consortium announced on Wednesday that it was creating a multibillion-dollar bitcoin acquisition vehicle called Twenty One Capital that will absorb billions in cryptocurrency from the other partners with the aim of buying up more bitcoin…

It will be formed from a reverse merger with the younger Lutnick’s special purpose acquisition vehicle — Cantor Equity Partners, which raised $100mn last year — with the aim of finding a target company.

With the transaction closed, Twenty One is majority owned by Tether, with — in case this deal didn’t already have more red flags than China National Day — 24 per cent ownership by SoftBank, bought via a bitcoin contribution made by Tether on SoftBank’s behalf. Add in more bitcoin bought by a convertible bond issuance and equity placement, and the company gets to launch with 42,000 bitcoin.

In short, it’s a company made of bitcoin, that will issue debt or equity to buy more bitcoin, with presumably the aim of either making its price rise, or not fall. Alongside these core functions, it will also create “educational material” about bitcoin and act as a content partner and adviser to other people who are interested in bitcoin. Diversified, this is not.

The full filing including the relevant 8-K and press release can be found on the SEC’s website here, but it’s the bundled presentations — outlining what has excitingly been called ‘Project Mystery’ — that caught our eye.

Twenty One will be piloted by Jack Mallers, a 31-year-old who for some reason dressed as a 14-year-old being dragged to the shops by his mum:

Mallers is described as a “visionary”, which is no doubt why Twenty One’s business model is basically to copy Michael Saylor’s MicroStrategy.

After beginning with some boilerplate bitcoin bumpf, Twenty One’s presentation descends into what is basically a MicroStrategy business case study, including a handful of charts studying the bitcoin-buying journey of a company which, lest we forget, is not Twenty One.

So why would an investor put their money into Twenty One, rather than MSTR, the company whose slipstream it is trying to catch? The answer, possibly, lies in these circles:

Twenty One wants to show its commitment to the bit via two key performance metrics, to “reflect its Bitcoin-denominated capital structure and Bitcoin-focused mindset”. The first is Bitcoin Per Share, which Twenty One says is the:

Amount of Bitcoin each fully-diluted share represents, reflecting shareholder ownership in Bitcoin rather than fiat earnings per share

It’s worth stressing that, should the worst happen, investors may find that there is a material difference between “share ownership in bitcoin” and “share ownership of bitcoin”.

The other new metric is Bitcoin Return Rate, the rate at which BPS grows. When MicroStrategy’ has already gifted to the world the nonsense concept of “bitcoin yield” it’s hard to see why BRR needs its own name, but we’re sure it’ll make for nice charts.

Anyway, since words like “pure play”, “capital-efficient” and “streamline” being thrown around, investors are no doubt expecting a clear-cut transaction structure.

Uh:

Anyone who gets their head around that and feels comfortable that they wished to get involved could get in touch with the deal’s sole placement agent, Cantor Fitzgerald — where Brandon Lutnick is chair. How did they get the gig?