Circle, issuer of the USDC stablecoin, has reached nearly $50 billion 15 days after its IPO, which was conducted with a valuation below $8 billion. This enormous surge occurs in the context of the GENIUS Stablecoin Act, which is currently being processed in the U.S. House of Representatives for final approval.
However, Chamath Palihapitiya stated that Circle employees lost a significant part of this traditional IPO path while questioning this traditional method of going public and comparing it to a SPAC merger. In his recent post on platform X, Palihapitiya explained that throughout the entire IPO process, employees had to part with a total of 14.4 million shares at $31 per share, valued at $450 million.
However, upon reaching $3.456 billion on its stock market debut, the stablecoin firm lost nearly $3 billion in this process. Palihapitiya claimed that this is why he prefers SPACs over traditional IPOs.
The billionaire added that value is transferred to intermediaries in SPACs and direct listings, but at least it is disclosed upfront and is negotiable. In traditional IPOs, banks use opacity to reward their best clients with free shares.
“In this case, it was a $3 billion gift from Circle employees and investors to people they do not know, will never know, and have nothing to do with their journey,” Palihapitiya wrote.
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