Three days ago, Brief #002 [4] argued that Twenty One Capital was the listed floor of Tether’s house — a controlled vehicle holding 43,514 Bitcoin while the rest of the empire was still being moved in. The Brief left one question explicitly open: how Strike — Jack Mallers’ own company, the third leg of the announced three-way merger — would get priced when the terms finally landed. The 8-K Twenty One filed on May 20 [1] doesn’t answer that question. It does something more interesting. It removes the contractual structure that would have constrained the answer.
The press release Tether attached to the 8-K [2] called it a “deepened commitment.” The filing itself says the last contractual structure protecting Class A shareholders was dismantled, in one transaction, on May 19.
Four items on the 8-K. They are not four events. They are one.
Tether International — the El Salvador entity — bought all 89,106,748 of SoftBank’s Class A shares. SoftBank’s matching 89,106,748 Class B shares were not transferred. Per Twenty One’s Certificate of Formation, they were cancelled. The Governance Agreement that the Company, Tether Investments, Bitfinex (iFinex) and SoftBank signed at listing — the one giving SoftBank reserved rights over board size, director elections, charter amendments and identified “20% Reserved Matters” — was terminated the same day. SoftBank’s two directors, Jared Roscoe and Vikas J. Parekh, resigned. Following Mr. Roscoe’s resignation the audit committee dropped below the two-independent-director minimum required by NYSE Listed Company Manual Section 303A.07(a). The company notified the New York Stock Exchange of its non-compliance on May 20. [1]
Strip the names. A public company whose votes were already concentrated in two affiliated holders lost the only outside party with contractual leverage over the controller, and two of its independent directors, in the same hour. The Governance Agreement was not paperwork. It was the wall. SoftBank, with roughly a billion dollars of skin in the deal, was the third signature that made it binding. SoftBank paid $288 million to leave, and the wall went with it. [4]
A few words on each piece.
The Class B cancellation is the part that does the structural work. Class B carries the votes. SoftBank’s economic Class A went to Tether — that part is a normal share transfer. The Class B that SoftBank held was *cancelled*, not transferred. Tether did not need it: Tether’s own Class B already provided control. What the cancellation removes is the third party from the voting register. There is no longer a third Class B holder to constrain the first two. The Governance Agreement, which formalised that constraint contractually, becomes redundant the moment SoftBank loses its vote. It is terminated the same day for the same reason. [1]
The audit committee is a smaller piece, but worth pausing on. NYSE rules require an audit committee of two independent directors during a company’s listing transition period, three after it. Mr. Roscoe was one of the two. The day he resigned, the company moved out of compliance. The filing says Twenty One “expects to appoint, as soon as practicable, an additional member” — meaning the controller picks the next outside director. [1] That is what control of the board looks like in practice: the same hand that voted to cancel a vote is the hand that picks the next independent.
Now the math. The price has not moved. XXI sits at $7.34 today, roughly where it sat when Brief #002 published three days ago. Against a Bitcoin NAV near $8.60 per share, that is 0.85x. [3] And it had been somewhere in that band for months before the Brief — sub-NAV is not the new information here. What the new information illuminates is what the discount was always pricing. The market had been treating the wrapper as suspect for a long time. The 8-K is the company confirming, in its own filings, why the market was right. The discount hasn’t moved on the news because the market wasn’t waiting on it. The market is waiting on the next document.
That document is the S-4 that prices Strike. Worth pausing on what Strike is, because of the three companies being folded into XXI, Strike is the only one with an operating business in the conventional sense. Twenty One brings the coin pile — a stack, not a P&L. Elektron brings a mining business, which is genuinely operational but whose economics are the BTC price written sideways: revenue varies with the same input the company exists to hold. Strike brings something different. It is Jack Mallers’ Lightning-rail payments app and B2B API. The fees compound on transaction volume, not on coin price. In a combined entity that is otherwise a Bitcoin ETF in corporate clothing, Strike is the only piece that earns its own multiple. Its last externally disclosed valuation, before the Tether credit facility, was in the low hundreds of millions in 2022. Its true value today — bigger or smaller, by how much — is the question the S-4 has to answer.
Which is where the May 19 transaction matters. With one party controlling the buyer, one owning a seller, and one bankrolling the other seller, what would have disciplined the Strike valuation was the Governance Agreement. SoftBank’s “20% Reserved Matters” clause is exactly the kind of provision that requires an arm’s-length third signature on affiliated-party valuations. That clause is gone. The arm’s-length third party is gone. The party that sets Strike’s number into the merger is the same party that financed Strike with $2.1 billion and that controls the buyer absorbing it. The S-4 is the document where Class A finds out what that number is. It is, in every meaningful sense, Tether’s number.
The Pharaoh’s view. A Bitcoin treasury company is two things — the stack and the structure. The stack at XXI is still 43,514 coins, real and verifiable. [3] The structure, as of nine days ago, is a controlled vehicle that lost its independent third signatory, its two outside directors, and its NYSE audit-committee compliance in the same transaction — and, in the same transaction, lost the contractual structure that would have bound how Tether sets the Strike merger number. When the S-4 lands, that number is Tether’s call. The minority Class A shareholder finds out what they own when the prospectus prints.
That is what changed on May 19. Not who owns Twenty One — Tether already controlled the votes. What changed is that nothing binds how Tether values its own assets into the company you hold. Read the 8-K as the structure clearing the table for a number the market has not yet seen. Price XXI as a holder of 43,514 real coins whose Strike-leg valuation has just become a unilateral decision by a single counterparty. That is not the same security it was on May 18.
Nothing in The Pharaoh Brief is investment advice. It is filings, numbers, and one operator’s read of them. Do your own research.
**P.S.** A reader of Brief #002 may notice that the Brief said Tether and Bitfinex “appear as Twenty One’s two big holders, as though they were a coalition of two — they are not. Bitfinex is iFinex, Inc., the company that owns Tether. The coalition is one family.” The 8-K filed May 20 confirms it in the company’s own caption — the Governance Agreement is between *Twenty One Capital*, *Tether Investments S.A. de C.V.*, *iFinex, Inc.*, and *Stellar Beacon LLC* (SoftBank). With SoftBank out, the parties to that contract were one entity, its sibling, and the public company they jointly controlled. That is why terminating it took one signature, not three. [1]
Sources
[1] Twenty One Capital, Inc. — Form 8-K, filed May 20, 2026: https://www.sec.gov/Archives/edgar/data/2070457/000121390026059270/ea0291071-8k_twenty.htm
[2] Tether, “Tether International Deepens Commitment to Twenty One Capital Through Acquisition of SoftBank’s Stake” (May 20, 2026): https://tether.io/news/tether-international-deepens-commitment-to-twenty-one-capital-through-acquisition-of-softbanks-stake/
[3] Twenty One Capital, Inc. — Form 10-Q for the period ending March 31, 2026 (filed May 13, 2026): https://www.sec.gov/Archives/edgar/data/2070457/000121390026055938/ea0287897-10q_twentyone.htm
[4] The Pharaoh Brief #002, “Tethered to the Empire” (May 25, 2026): https://thepharaohbrief.substack.com/p/tethered-to-the-empire