Circle Stock Plummets 9% as Company Moves to Cash In on Stock Boom With $1.4 Billion Share Sale
Circle Internet Group Inc., the stablecoin issuer behind USDC, saw its shares fall about 9% on Tuesday after news broke that the company is planning a massive $1.4 billion share sale.
Circle share price (Source: Yahoo Finance)
Bloomberg first reported the details of the offering, which comes just two months after Circle’s hotly anticipated IPO.
IPO Darling Turns to Quick Follow-On Offering
On Tuesday, Circle announced plans to sell 10 million shares — 2 million from the company and the rest from existing shareholders including CEO Jeremy Allaire. Based on current prices, the sale could be worth about $1.4 billion.
The move comes on the heels of a sizzling crypto IPO week, with exchange Bullish soaring 84% in its first trading session. Circle’s stock has been a standout performer, surging 349% since its June debut, even though it trades at less than half its June 23 peak of $298.99.
Lock-Up Waiver Clears the Way for Early Insider Selling
The sale’s timing caught many by surprise, as it comes well before the year-end expiration of the IPO lock-up period, which usually restricts insider sales. According to Bloomberg, lead underwriter JPMorgan Chase & Co. — which has the authority to waive the lock-up — approved the deal.
Josef Schuster, founder of IPO index firm IPOX Schuster, called the move “opportunistic” and noted that it’s a way for risk to shift into the public market. The offering, marketed over two days, is reportedly oversubscribed and expected to price on Thursday.
Lessons From the Dot-Com Era
David Erickson, adjunct professor at Columbia Business School and former co-head of global equity capital markets at Barclays Plc, described the move as a clear cash-in. With the stock having climbed 400% since its IPO, he said it was logical for insiders to sell now, though he expects the offering to be priced well below recent trading levels.
Return offerings within 60 or 90 days of an IPO were common in the dot-com era boom of 1999 and 2000, and Erickson said it was surprising that more companies that have surged since their IPOs this year had not done the same to help manage the overhang of selling shareholders.
Karman Holdings Inc. conducted a similar sale in July, and major 2024 IPOs — including Viking Holdings Ltd., UL Solutions Inc., and StandardAero Inc. — have done the same before their lock-ups expired.
Circle Investors Still Eager Despite Discount Likely
Analysts say the offering will likely price at a discount to recent trading levels.
Jeff Zell, senior analyst at IPO Boutique, said that after two months of high-volume trading at elevated prices, “the market has had time to price the company rationally.”
If completed, the sale would raise more than Circle’s original IPO proceeds, further highlighting investor appetite for one of the hottest crypto-related stocks of 2025.
