On May 28, Circle Internet Financial, the issuer of the second-largest stablecoin by trading volume, USDC, announced the highly anticipated launch of its initial public offering (IPO).
This landmark move is set against the backdrop of increasing interest from traditional finance players, notably BlackRock, the world’s largest asset manager.
Major Players Back Circle’s IPO
In its official announcement, Circle revealed plans to offer 24 million shares of its Class A common stock. Of these, 9.6 million shares will be offered directly by Circle, while 14.4 million shares will come from selling stockholders.
Additionally, the stablecoin issuer intends to grant underwriters a 30-day option to purchase up to 3.6 million extra shares to accommodate over-allotments. The expected price range for the shares is between $24.00 and $26.00, although the final terms will depend on market conditions.
Circle has applied to list its Class A common stock on the New York Stock Exchange under the ticker symbol “CRCL.” The offering is being managed by a consortium of major financial institutions, including J.P. Morgan, Citigroup, and Goldman Sachs, who are acting as joint lead bookrunners. Other firms involved include Barclays, Deutsche Bank Securities, and Société Générale, among others.
Notably, BlackRock is reportedly looking to acquire approximately 10% of the shares offered in this IPO. This potential investment underscores the growing convergence between traditional finance and the cryptocurrency sector.
BlackRock currently manages a government money market fund for Circle, which holds 90% of the reserves backing the USDC stablecoin. As of April 30, 2024, this fund boasted nearly $30 billion in net assets.
Co-Founders To Sell Shares
The demand for Circle’s IPO has reportedly exceeded the available shares, indicating strong investor interest ahead of the expected pricing on June 4. While the structure of BlackRock’s investment may vary—potentially involving an affiliated entity—both companies have declined to comment on the specifics at this time.
Circle’s CEO, Jeremy Allaire, who co-founded the company in 2013, reportedly plans to sell about 8% of his stake, equating to 1.58 million shares. Co-founder and former co-CEO Sean Neville is set to offload 11% of his shares, alongside finance chief Jeremy Fox-Geen.
Notable venture firms including Accel, Breyer Capital, General Catalyst, IDG Capital, and Oak Investment Partners are also scheduled to sell around 10% of their holdings.
While insider sales can sometimes raise red flags for investors, industry experts believe that the remaining stakes held by these investors demonstrate their continued confidence in Circle’s future.
Lise Buyer, founder of IPO consultancy Class V Group, noted, “The big guys are holding enough so they still have skin in the game, so that shouldn’t alarm investors.”
Featured image from DALL-E, chart from TradingView.com
