Jeremy Allaire, co-founder and CEO of Circle, speaks on April 23, 2025 at the TIME100 summit in New York.
Jemal Countess | Time | Getty pictures
Stablecoin Emittent Circle is one of the first important cryptocurrency companies that go to the stock exchange in the United States, which is not the only unusual aspect of its IPO.
In Circa's updated brochure on Tuesday, the company said that it would sell 9.6 million shares on offer, while existing shareholders would sell 14.4 million shares. It is extremely rare for more shares of investors than the company.
Facebook Was one of the few remarkable exceptions. In the massive IPO of 2012 of the social network, which brought in a record of $ 16 billion at the time, 57% of the shares were sold by existing stakeholders. The circle is even higher at 60%.
Circle, the company behind the popular USDC StableCoin, gave no reason for his decision, and a spokesman rejected a statement. The company is profitable after achieving a net result of $ 64.8 million in the last quarter. It had almost 850 million US dollars in cash and equivalents and, according to the expected area of 24 to 26 US dollars, collects a further 240 million dollars in the IPO.
One reason for the strong amount of insider sales is probably the extended sections of the lean returns for risk capital companies. After the market culminated in 2021, the increasing inflation led to increased interest rates, which pushed investors out of the risk and tech companies forced them to avoid stockings. Wall Street was Bullisch on an IPO when President Donald Trump took office in January, but only a few debuts took place.
Add everything and the Tech investors from Silicon Valley urgently need liquidity.
“Private investors are desperate for outputs so that they can return to their investors,” said Lise buyer, founder of the IPO consulting company class -V group, even though they are not sure of the company's motivations. “It is probably reflected in a multi -year drought in stock exchange and a strong wish of the early investors to get some liquidity.”
The CEO of Circle, Jeremy Allaire, who was a co -founder of the company in 2013, loads about 8% of its share according to the prospectus and sells 1.58 million shares. Sean Neville, co-founder and former co-CEO, is supposed to sell 11%, as well as CFO Jeremy Fox Green.
Venture companies Accel, Breyer Capital, General Catalyst, IDG Capital and OAK Investment Partners are all to sell about 10% of their shares. While the Wall Street insider sales could represent a disturbing signal, the buyer said that the remaining stocks of investors show that they are still expressing the belief in the company.
“The big boys hold enough so that they still have skin in the game, so that investors should not alert,” said buyer.
For most technical IPOs over the years, the percentage of the float of investors was significantly below half. In Reddit IPO, insider sold 31% of shares. The percentage was 36% for the online food connection company Instacart in 2023.
Sometimes it is much less than that. CoreweaveA former cryptocurrency miner who is now renting Nvidia Chips went to the stock exchange in March, whereby managers and other shareholders make up 2.4% of the shares sold. Already in December 2020, Airbnb Investors made around 3% of the IPO shares and in Doorash IPO In the same week, existing investors do not sell stocks.
In times when the IPOs are hot and the shares fly after their debut, investors incentives to keep the profits after the Lockup period has expired and be stuck. This is not today's market that explains why half of the shares were sold in stock exchange company Etoro The IPO came from existing investors at the beginning of this month.
The exit activity for US -VCs rose by almost 35% to 98 billion US dollars last year, after reaching the lowest in 2023, according to the National Venture Capital Association and PitchBook in 2023. The highlight was over 750 billion US dollars in 2021.
“This continuation of the liquidity dice after 2021 shows continuing topics related to exit pathways and investor behavior,” wrote the NVCA in its annual yearbook published in March.
In some cases, companies need insiders to sell shares so that there are enough swimmers for trade. If Circle did not include investors in his share sale, he would offer the public less than 5% of the outstanding shares. This number was 7%for Etoro.
– The ARI -Levy from CNBC contributed to this report.
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