Circle IPO lost $1.72 billion in potential revenue, becoming the seventh largest underpriced IPO case in decades

ChainCatcher news, according to Fortune magazine, stablecoin issuer Circle lost $1.72 billion in potential earnings due to its pricing strategy in the June 5th NYSE IPO, marking the seventh largest IPO underpricing case in nearly forty years. The company issued 34 million shares at $31 per share, raising $1.1 billion, but the closing price on the first day of trading reached $82.84, a 167% increase.

Data shows that if priced at the closing price, Circle could have gained an additional $1.72 billion in funding, equivalent to twice its cash reserves on the balance sheet before the IPO. Jay Ritter, an IPO research expert at the University of Florida, pointed out that this discrepancy is second only to the historical records of six companies, including Visa and Airbnb. Currently, Circle's market capitalization stands at $16.6 billion, corresponding to a price-to-earnings ratio of 106 times its projected net profit of $157 million for 2024.