David Edwards
Circle (CRCL) stock witnessed a further 20% surge on Friday and has surged approximately 700% since its IPO earlier this month. Yet, billionaire investor Chamath Palihapitiya highlighted a stark irony: Circle’s employees absorbed nearly $3 billion in losses due to the company’s choice of a conventional IPO over a SPAC merger. The traditional route compelled employees to liquidate 14.4 million shares as part of the listing process, creating significant opportunity cost.
Circle’s opening valuation—under $8 billion—ballooned toward $50 billion within 15 days. The momentum coincides with the introduction of the GENIUS Stablecoin Act in the U.S. House, which fuels enthusiasm around USDC stablecoin issuer Circle.
However, Palihapitiya criticized the IPO structure, stating employees sold shares at $31 each—generating roughly $450 million—while Circle’s listing value surged to $3.456 billion. The result? Nearly $3 billion effectively funneled away. He opined that IPOs conceal wealth from insiders, favoring opaque banking allocations, calling it a “$3B gift from the employees and investors of Circle to people they don’t know.”
In contrast, Palihapitiya declared his preference for SPACs, citing their transparent negotiations through disclosed arrangements. He also spotlighted Tron founder Justin Sun’s decision to go public via SPAC, bypassing IPO conventions, and preparing for a rebranding under Tron Inc. post-merger.
