All told, Circle sold 39 million shares, raising $1.145 billion after underwriting fees of $67 million. Had the shares fetched the $107.5 close on June 6 instead of the $31 (excluding fees) paid in the presale by the likes of mutual and hedge funds, the company and insiders combined would have collected $4.144 billion. Hence, as of the second day of trading, the IPO had left a staggering $3 billion on the table. Put simply, for every $1 going to the sellers, $3 in two-day gains flowed to the underwriters’ Wall Street clients as a windfall.
At a market cap of $22 billion, Circle is selling at 140 times earnings. Given that treacherous valuation and the onslaught of stablecoin rivals invading its space, Circle is the epitome of an ultrahigh-risk stock. Money that might have been sitting in its treasury as a buffer against tough times vanished in this mind-bending spectacle that only the confluence of crypto craziness and Wall Street’s genius for underpricing IPOs could have staged.
