Circle Insiders Rush to Lock In 349% Surge With Early Share Sale

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(Bloomberg) — As investors trampled over each other to buy into this week's hot crypto initial public offering, executives at Circle Internet Group Inc. were working to quickly capitalize on the stunning gains in its own shares since the stablecoin issuer went public in early June.
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The company on Tuesday announced a sale of 10 million shares — 2 million from Circle, the rest from shareholders including Chief Executive Officer Jeremy Allaire — worth about $1.4 billion at current market prices, just a day before digital assets exchange Bullish soared 84% in its debut session. Circle is off to a hot start itself: The stock is up 349% and it reported solid quarterly numbers earlier this week.
The offering comes far sooner than expected, just two months after Circle's debut — well within lock-up arrangements that would otherwise restrict insider selling until the end of the year. But JPMorgan Chase & Co., the lead bank on the IPO and the decision-maker on whether those lockups can be waived, isn't standing in the way of the sale.
'It's an opportunistic move by them that makes sense and that's how risk gets transferred into public market,' said Josef Schuster, the founder of Chicago-based IPO index firm IPOX Schuster.
The two-day marketed offering was oversubscribed and on track to price on Thursday, according to people familiar with the matter. A representative for Circle didn't immediately respond to a request for comment.
Even after shares trade at less than half their peak of $298.99 on June 23, a deal raising close to $1.4 billion would be more than the amount raised in the IPO.
'It is a cash-in exercise but with the stock up 400% since the IPO, it stands to reason they should be able to sell,' said David Erickson, an adjunct professor in Columbia Business School's finance department and a former co-head of global equity capital markets at Barclays Plc. 'That said, it will probably price at a significant discount to where the stock was trading before the deal was filed.'
Return offerings within 60 or 90 days of an IPO were common in the dot-com era boom of 1999 and 2000, and Erickson said it was surprising that more companies that have surged since their IPOs this year had not done the same to help manage the overhang of selling shareholders.
However, Circle isn't the first 2025 IPO to bring a return offering inside a lock-up period. Last month, Karman Holdings Inc.'s existing shareholders sold 21 million shares for more than double the IPO price, nearly six months after the company went public in February. Some of last year's biggest IPOs, among them cruise line Viking Holdings Ltd., industrial safety standards firm UL Solutions Inc., and aircraft engine maker StandardAero Inc., also did these deals before their lockups expired.
Circle's return was much speedier than those exercises. But with appetite for its shares still seemingly robust, investors appear relatively unfazed by the rapidity of the sell-down.
'After such an enthusiastic IPO debut and two months of steady, high-volume trading at elevated levels, the market has had time to price the company rationally,' said Jeff Zell, the senior analyst at research firm IPO Boutique.
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