Stablecoin USDC issuer Circle seeks IPO after listing! Secondary market valuation of US$5 billion

This site (120bTC.coM): CoinDesk quoted people familiar with the matter as saying that when Circle Internet Financial, the stablecoin USDC issuing company, seeks a public offering (IPO), the valuation on the secondary market is 5 billion to 5.25 billion. between US dollars. The company was valued at about $9 billion when it tried to go public through a SPAC transaction in 2022, but was ultimately unsuccessful and challenged the IPO again in 2024.

Secondary market transactions come from early investors and employees

It is rumored that Circle has allowed some stocks to be traded on the secondary market, but these transactions are limited to specific circumstances and handled on a case-by-case basis. The main participants in these transactions were early investors and Circle employees seeking liquidity.

One source said employees typically liquidate stock options before a company goes public, a common practice in the technology and financial sectors. Sources indicate that sellers in these transactions are primarily early investors seeking to cash out or Circle employees exercising stock options, a practice that allows for liquidity and personal financial planning ahead of an expected IPO. Current trading restrictions ensure that company valuations remain strong and attractive to potential new investors.

Circle’s valuation has changed less than before

Comparison with 2022 valuation

Circle’s valuation has changed significantly from its peak of approximately US$9 billion in 2022. The early valuation was tied to Circle's attempt to go public through a special purpose acquisition company (SPAC) deal with Concord Acquisition Corp. However, the deal was terminated in December 2022 due to the failure of the U.S. Securities and Exchange Commission (SEC) to approve it in time and the crypto winter that followed the collapse of FTX.

The current market sentiment is affected, but there is no need to worry

A source said that investors should not be overly worried about the difference in valuation figures between 2022 and now. The current secondary market is considered very depressed and many investors are willing to sell at any price due to the need to raise cash. This situation results in a lower valuation in Circle's secondary market transactions, but this may not reflect the company's actual underlying value once it goes public.

The Compliance Strategy of Circle, the Second Stablecoin

Circle’s USDC once caught up with the USDT issuance of the leading Tether. After the collapse of Silicon Valley Bank in 2023, it caused a temporary decoupling of market prices. The market was worried about redemption funds. Let USDC’s momentum decline again. However, the era of big regulation is coming, and many legal regions have imposed strict regulations on stablecoin issuers, which has also created potential risks to the market share of the more mysterious Tether.

Whether Circle can survive under the compliance strategy and capture more market share remains to be seen.

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