Circle Internet Group’s highly successful stablecoin USDC debuted on the New York Stock Exchange, but it came at a steep cost. The company sold 34 million shares at $31 per share, raising $1.1 billion in cash. However, by the market close, Circle’s stock had surged to $95 and eventually settled at $82.84, resulting in a 167% gain for the day.
This underwhelming performance led to a staggering loss of potential revenue: if Circle had received the full price of $82.84 per share, it would have collected $2.82 billion instead of $1.1 billion. This shortfall amounts to $1.72 billion, making it one of the largest IPO losses since 1980.
According to Jay Ritter, a leading expert on IPOs, this figure ranks seventh among all offerings since 1980. The underwriting versus first-day price discrepancy is only exceeded by instances of prominent companies like Visa and Airbnb.
Circle’s market capitalization now stands at $16.6 billion, giving it a pricey public offering with a PE ratio of 106. To grow, the company relies on issuing USDC, which generates interest income from channeling proceeds into safe fixed-income securities. However, this business model is vulnerable to competition and rising interest rates.
If Circle fails to maintain its competitive edge, losing the extra $1.7 billion that went to underwriters’ clients instead of its coffers may become a significant concern. This amount exceeds ten times the company’s profits from last year, highlighting the risks in its revolutionary business model.
Source: https://fortune.com/2025/06/06/circle-internet-group-ipo-crcl-underpricing-stock-outlook-profits