Circle’s dynamite IPO this week wasn’t just impressive by crypto standards—it outperformed expectations to a degree unrivaled even by America’s most prominent tech companies.
The evening before its Thursday trading debut on the New York Stock Exchange, Circle priced its stock, CRCL, at $31 a share. That represented a mark-up from the lower share prices the firm floated earlier in the week: $26, and then $28. Such last-minute moves are generally indicative of increased investor interest in a company’s stock market debut.
But nothing could have prepared Wall Street for the stablecoin issuer’s bombshell first-day performance. Within minutes of the market’s opening, CRCL more than tripled in price, and experienced such volatility that the New York Stock Exchange had to halt trading on the stock multiple times.
By the end of Thursday's trading day, the price of Circle sat at $82.84—up 167% from the offering price. On Friday, CRCL hit a new high of $123.51, coming within cents of fully quadrupling its IPO price.
Among other flashy tech IPOs of recent years, that performance is a standout. While some American tech giants may be worth more than Circle, few have shattered early trading expectations to such an extent.
Meta, formerly Facebook, for example, IPO’d at $38 back in 2012. After its first day of trading, the company’s stock remained stagnant at $38.23, disappointing investors.
That price nonetheless valued Facebook at a monster $104 billion, though—far more than the $19 billion valuation Circle scored yesterday, even with overperformance factored in.
Uber, another tech giant with a hotly anticipated IPO, failed to meet expectations after its Wall Street debut in 2019. The disruptive rideshare startup priced its stock at $45, but failed to drum up enough excitement on its first day of trading. UBER shed 8% that afternoon, closing under $42. But the company’s valuation at that point was still nothing to scoff at: $69.7 billion.
It’s a similar story in fintech. When Robinhood launched its stock in July 2021, the new-age financial services company aimed for an opening price per share of $38. HOOD’s stock ended its first day of trading down over 8%, at $34.82, leaving the company with a market capitalization of $32 billion.
Even when major tech stocks have outperformed analyst expectations, they’ve typically done so by smaller margins than Circle achieved this week. In 2020, at the peak of the COVID-19 pandemic, Airbnb’s stock more than doubled its IPO price on opening day, surging from $68 to $144.71 by the closing bell.
That 112% jump was heralded at the time as a fairytale success story—but still, did not approach Circle’s first-day result. Scale again, though, is an important caveat: Airbnb’s first day of trading valued the company at a whopping $100.7 billion.
What accounts for Circle’s distinctive overperformance on Wall Street this week? Analysts told Decrypt the stock fared so well thanks not only to excitement surrounding stablecoins, which may soon be greenlit for a wide range of applications by Congress; but also due to the fact that Circle’s stock currently represents one of the only means for institutions and retail traders to invest in the emergent sector.
The company’s competitors, namely market leader Tether, are not publicly traded.
Edited by Andrew Hayward
