Circle, the issuer of the stablecoin USDC (USDC-USD), is undergoing a major valuation shake-up. After being valued at nearly $9 billion during its botched SPAC deal in 2022, the company’s stock has now nosedived to around $5 billion as it gets ready for a fresh initial public offering (IPO) attempt.
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Circle’s Drop in Valuation
Circle Internet Financial, which saw its valuation soar to $9 billion during its 2022 attempt to go public via a merger with Concord Acquisition Corp, is now facing a reduced valuation. According to CoinDesk, Circle’s privately held stock currently suggests a valuation of $5 billion to $5.25 billion. This decline follows a failed merger deal in December 2022, primarily due to the SEC’s delay in approval and the fallout from the FTX collapse. CoinDesk also noted that the secondary market, where early investors and employees sell shares before an IPO, has been depressed due to widespread investor cash needs, further contributing to the lower prices.
Secondary Market Valuation Revealed
According to BlockBeats, Circle’s move to allow some secondary market trading before its IPO indicates a strategic approach to manage liquidity. According to two sources with knowledge on the matter, “The company is not allowing trades below a $5 billion valuation,” showing a careful effort to keep the stock price steady before the IPO.
USDC Remains a Key Player
Circle’s USDC stablecoin remains a key player in the crypto market, with the number of USDC wallets holding at least $10 rising 59% last year to approximately 2.7 million. The number of transactions reached 595 million by late November 2023, showcasing its key role in the crypto economy.
In January, Circle filed a confidential draft S-1 form with the SEC, marking its formal step toward a public offering. The company plans to move its legal home to the U.S. from Ireland, as reported by Bloomberg in May, further indicating its readiness for a new market debut.
As Circle gears up for its IPO, the focus will be on how it manages its revised valuation and navigates the volatile secondary market.
