The IPO of Circle has written the story of Wall Street with the highest increase over two days since 1980. However, behind this spectacular performance has hidden a disturbing paradox: the USDC transmitter has literally abandoned $ 3 billion to institutional investors. How to explain this colossal financial sacrifice?
In short
- Circle achieves the highest IPO performance over two days since 1980 with +250 %.
- The action jumped from $ 31 to $ 107.5 in just 48 hours rating.
- The company leaves $ 3 billion “on the table” by undervaluating its introduction.
- This sum Place Circle in the 7th row of the biggest shortcomings to win in the history of IPOs.
A record on the stock market which is very expensive in Circle
Circle orchestrated on Thursday June 5 a real financial tsunami. From the first session, the action of the transmitter of the Stablecoin USDC flew to 88 dollars, a dazzling increase of 180 % compared to the subscription price of 31 dollars fixed by JPMorgan, Goldman Sachs and Citigroup. This initial performance was just a taste of what awaited investors.
Friday, June 6, confirmed the insatiable appetite for the market. The action has crossed the symbolic bar of 107.5 dollars, adding almost 30% additional to its valuation.
In the space of only two days, Circle achieved a cumulative increase of almost 250 %, spraying all the historic records according to Jay Ritter, professor at the University of Florida and global authority in terms of IPO.
This performance relegates in the background C3.AI, the software supplier which hitherto held the record with “only” 209 % increase when it entered Nasdaq in 2020. Circle has just rewritten the codes of Wall Street and confirms the institutional craze for regulated crypto assets.
This IPO clearly demonstrates the confidence of investors towards regulated stable and marks a decisive turning point, raising stable of niche tools to a central financial infrastructure.
Ryan Lee, chief analyst at Bitget Research
The magnitude of this success is explained by the perfect timing chosen by Circle. After postponing its IPO last April in the face of economic turbulence, the company led by Jeremy Allaire was able to capitalize on a favorable regulatory context and the improvement of the Crypto feeling under the Trump administration.
A financial sacrifice of 3 billion which questions
Behind this stock market jubilation hides a disturbing economic reality. Circle sold 39 million shares when it was lifted, cash $ 1.145 billion after deduction of the subscription fees of 67 million.
If the company had set its introductory price during the closing price of Friday, June 6, or $ 107.5, it would have raised $ 4.144 billion.
This abyssal difference from 3 billion represent what experts call money “left on the table”.
Concretely, for each dollar recovered by Circle and its managers, three dollars in capital gain were offered to privileged customers of investment banks. An unexpected boon for these institutional investors who were able to resell their actions with considerable immediate profits.
This astronomical sum Place Circle in the seventh row of the biggest shortcomings to win in the history of IPOs since 1980. Only Visa, Airbnb, Snowflake, Rivian, Doordash and Coulang made “worse” in terms of abandoned money during their introduction. An unenviable classification that raises legitimate questions about the pricing strategy adopted by Circle's advice.
The irony of the situation becomes even more blatant when we remember that Circle had rejected an offer of Ripple's buyout estimated between 4 and 5 billion dollars. This decision, which seemed daring at the time, today reveals all its strategic relevance, even if financial execution is perplexed.
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