Ripple-backed Evernorth faces 73.7 million-share selling overhang after brutal stock market debut

Evernorth filed to register 73.7 million shares for potential resale as its stock plunged following its Nasdaq debut.

The XRP treasury company’s Oct. 30 SEC filing identifies Ripple Labs, Arrington XRP Capital and affiliates of Japan’s SBI Holdings among investors whose holdings could eventually enter the public market.

The registration comes as Evernorth’s shares have lost nearly 40% of their value from their October 12 debut-day high of $19.39.

XRPN fell to a post-merger record closing low of $11.70 on Nov. 2 before recovering to $11.98 the following day, leaving the stock approximately 38% below that initial high.

The decline has brought additional attention to Evernorth’s ownership structure, which includes some of the XRP industry’s most prominent institutional backers.

According to the filing, Arrington XRP Capital Fund registered approximately 33.82 million shares for potential resale, while Ripple Labs accounted for another 18.14 million.

Four SBI-affiliated entities collectively registered approximately 11.79 million shares, with the Larsen Lam Children’s Remainder Trust, associated with Ripple co-founder Chris Larsen, accounting for another 7.15 million.

Other investors named in the registration include Pantera Capital’s DAT Opportunities fund, GSR Markets Switzerland, Payward, the parent company of Kraken, and Japanese gaming company gumi.

The registration remains preliminary and does not establish that any of these investors have sold shares or intend to sell their entire holdings.

Major investors face six-month lock-up as Evernorth shares struggle

The filing reveals that substantial portions of the registered securities remain subject to contractual restrictions established when Evernorth completed its merger on Oct. 9.

Ripple, the Arrington-controlled sponsor and the Larsen-associated contributor entity entered lock-up agreements restricting transfers for six months, generally until April 9, 2027, subject to specified exceptions.

Evernorth disclosed that approximately 7.04 million issued Class A shares, representing 29.8% of outstanding Class A shares at the merger closing, were subject to the restrictions.

The registration also covers securities that have not yet become publicly traded Class A shares.

Of the 73.7 million shares, approximately 19.1 million were already issued Class A stock, while 31.39 million could become available through conversions of Class C shares and another 22.95 million through exchanges or redemptions of company units.

Those conversions and exchanges remain subject to ownership limits and other contractual requirements.

Evernorth said it is registering the securities to satisfy commitments made under agreements connected to its business combination, rather than announcing any decision by shareholders to liquidate their positions.

The company would receive no proceeds from eventual shareholder resales, except for possible cash received from warrant exercises.

However, the prospect of additional shares entering the market creates a potential challenge for a company already confronting substantial volatility.

In its risk disclosures, Evernorth warned that large shareholder sales, or expectations of future selling, could depress its stock price.

The company entered public markets holding approximately 473 million XRP, with its strategy centered on expanding its cryptocurrency reserves and increasing XRP holdings per share.

Its filing also disclosed that approximately 80% of the predecessor SPAC’s redeemable public shares were redeemed before the merger, leaving a smaller public shareholder base than originally contemplated.

The next major milestone for the registered investors will be the expiration of applicable lock-up restrictions in April 2027, provided the resale registration has become effective, and other requirements are satisfied.