Summary Evernorth, merging with Armada Acquisition Corp. II, offers a digital asset treasury focused on XRP with a $1.4B valuation. XRPN provides yield through XRP-denominated loans and market making, targeting 5–10% revenue yields on holdings. SPAC shares currently trade near redemption value, limiting downside risk and offering potential upside post-merger. I initiate coverage with a Buy, citing conservative entry, compounding potential, and an operating business model supporting XRP. Armada Acquisition Corp. II ( XRPN ) is a SPAC merger with Evernorth, a digital asset treasury (“DAT”) focused on XRP ( XRP-USD ). While DATs and SPAC mergers often are fraught with problems, this opportunity seems pretty conservative and is worth consideration. Proposed SPAC Merger Back in October, Evernorth announced the proposed merger, and Armada II's ticker changed to XRPN a few weeks later. This does not mean that the deal has closed, however, and the announcement indicated that it was expected to do so in Q1 2026. Other details included: Over $1 billion in gross proceeds About $230M is from the SPAC's trust At least $800M in a PIPE offering Valuation of about $1.4B SPAC Merger Slideshow (sec.gov) Evernorth is currently getting the transaction approved with the SEC. At that point, more thorough disclosures will be available about their underlying financials, so much of this thesis relies on estimates. Evernorth's Business Evernorth already operates a DAT with a dedicated focus on XRP, the native currency of Ripple's blockchain network. As of November, they declared ownership of 84.4M XRP at an average price of $2.54. SPAC Merger Slideshow (sec.gov) XRP has been selected by Evernorth because it believes Ripple's blockchain network supports faster and cheaper transactions than those of Bitcoin ( BTC-USD ) and Ethereum ( ETH-USD ). Cryptocurrency Market Caps (CoinMarketCap.com) XRP is also one of the largest cryptos by market cap, ranking fifth globally overall. This makes it one of the more relevant alternatives around which to form a DAT. Where it is different, however, is in its finite supply, which was fully capped when the coin was launched at 100B XRP. This means that the supply does not grow from processes such as mining or staking. When I covered DeFi Development Corp. ( DFDV ), I highlighted its ability to use Solana ( SOL-USD ) staking as the basis for an operating business to produce cash flow, something that I found to be tragically missing in Strategy's ( MSTR ) approach as a DAT. Even though XRP does not allow for staking in the same way, that doesn't mean it lacks an operating business. SPAC Merger Slideshow (sec.gov) Evernorth generates revenue by operating a bit more like an old-school financial by providing liquidity, mainly through: Loans denominated in XRP, yielding interest Market making XRP, creating a spread, and earning trading fees By doing these on-chain or in structured deals with financial institutions, Evernorth aims to be a bridge between DeFi and TradFi through its utilization of XRP. In effect, total XRP holdings produce some kind of yield as their revenue. Fully disclosed financials are not available yet, and estimates range from 5% to 10%. Yield from operations supports XRP accumulation. Of course, they can raise capital to support more accumulation over time, just like other DATs, particularly if shares trade at a premium to NAV or XRP per share. Outlook and Valuation Evernorth may be a bit lucky in that their merger and capital raise are occurring after the bearishness that has plagued cryptocurrencies since the fall. XRP 6M Price History (Seeking Alpha) After President Trump announced more tariffs on China on Oct. 10th, crypto prices began to decline and have largely not recovered. Many DATs that raised capital and purchased their coins at the peak of the euphoria in July (following the passage of the GENIUS Act) have had a tough time. Many trade at discounts to NAV and cannot accretively raise capital to purchase more. As most of their XRP will be purchased after this, they will be in a better position to grow the pot and perhaps ride any market recovery. Based on XRP's recent prices ($2.00 to $2.10), total holdings could be worth about $2B. Yielding 5% to 10% from the various ways they deploy XRP, this suggests revenue of $100M to $200M. XRP Trading Volume (Coinbase) As XRP's daily volume is close to the holdings Evernorth would have, it's feasible that minimal trading fees (0.01% to 0.02%) could support the lower potential yield. Loans with institutions could potentially be structured to yield more and pull the total up. DATs don't tend to have a lot of overhead, so there's a good chance most of this survives into net income (which would work out as retained XRP). A breakdown of their expenses will make this clearer. Even without raising capital, it's a very accretive opportunity. Plus, the SPAC shares come with the standard redemption rights. This is $10 per share for XRPN's purposes. As the stock barely trades above that, nearly all principal is safe for now, with potential upside from the merger and deployment of the XRP holdings to follow. Risk Factors A few things can complicate this thesis. Bearishness in crypto markets, to include XRP, could persist. This could happen after they accumulate their XRP holdings from the capital raised. This would make it hard to raise capital and accumulate more, delaying their strategy. We also don't yet know if management is willing to issue any kind of fixed-income securities, such as bonds or preferred stock. MSTR 6M Losses (Seeking Alpha) As MSTR's six-month performance has shown, the impacts of these are painful on the downside and require dilution of the common to meet fixed income obligations. Lastly, while there's natural compounding here, Evernorth is still limited by demand. Only so many people want XRP-denominated loans right now, and only so much trading volume will occur each day. Demand ceilings limit yield, and if expenses aren't managed, this could challenge profitability. Conclusion Investors have the opportunity to get into this DAT at roughly the lowest possible entry price, given the redemption rights of SPAC shares. Evernorth, as the merger candidate, isn't just doing capital raises and accumulation; it has an operating business to compound that should support use of its target crypto, XRP, over time. Overall, I see reasonable upside for both the short and long terms with little upfront risk, and so I initiate coverage with a Buy.
