Circle Internet Group Inc., a leading player in the stablecoin market, has successfully completed its initial public offering (IPO), raising nearly $1.1 billion in an upsized deal, with the share price surpassing initial forecasts. This robust market response signifies a growing acceptance and perceived legitimacy of stablecoin issuers within the broader financial landscape.
Successful IPO Marks Major Milestone
Circle, along with several of its existing shareholders, including co-founder and CEO Jeremy Allaire, sold a total of 34 million shares at a price of $31 each on Wednesday. This valuation places Circle’s market cap at approximately $6.9 billion based on the detailed outstanding shares in its regulatory filings. Once accounting for stock options, restricted stock units, and employee warrants, the fully diluted valuation rises to about $8.1 billion.
The successful offering has been marked by strong investor interest, with reports indicating demand exceeding 25 times the number of available shares when orders closed on Tuesday. This overwhelming demand prompted Circle to increase both the size and price of its IPO earlier in the week. The offering target was raised to 32 million shares at a price range of $27 to $28 each, a notable increase from the initial plan of selling 24 million shares at $24 to $26 each. Ultimately, Circle sold 14.8 million shares in the IPO, while selling shareholders divested the remaining 19.2 million shares.
Regulatory Winds and Growing Institutional Interest
The successful IPO comes at a pivotal moment for stablecoins, which are digital tokens typically pegged to fiat currencies like the U.S. dollar. Current legislation in the U.S. Congress aims to regulate these assets, a development many believe will enhance their legitimacy and potentially pave the way for broader adoption. However, this evolving regulatory landscape may also attract formidable new competitors.
Last month, The Wall Street Journal reported that some of Wall Street’s largest banks were jointly exploring the possibility of issuing their own stablecoins. Circle’s flagship product, USDC, held approximately 29% of the stablecoin market by the end of March, according to CoinMarketCap data cited in its filing. As of May 29, there was around $61 billion of USDC in circulation, as indicated on Circle’s website.
The IPO has also attracted notable institutional investors. ARK Investment Management, a tech-focused investment firm founded by Cathie Wood, expressed interest in purchasing $150 million worth of shares in Circle’s IPO. Additionally, BlackRock Inc., the world’s largest asset manager, reportedly intends to acquire around 10% of the shares being offered, a significant interest given BlackRock’s existing relationship with Circle. The firm manages a government money market fund for Circle, which holds 90% of the reserves backing its USDC stablecoin, with the Circle Reserve Fund reportedly holding $53.3 billion as of May 29.
Circle’s Journey in Public Markets
This IPO represents a major milestone in Circle’s trajectory. Following a $7.7 billion valuation after a funding round in 2022 according to PitchBook, Circle had initially filed for a confidential listing in early 2024, more than a year after abandoning a previous attempt to go public through a merger with a blank-check company (SPAC) that would have valued the firm at $9 billion.
The current IPO is being led by a consortium of Wall Street giants, including JPMorgan Chase & Co., Citigroup Inc., and Goldman Sachs Group Inc. Trading of Circle’s shares is expected to commence Thursday on the New York Stock Exchange under the ticker symbol CRCL.
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