Latest news with #CircleInternetGroup
Yahoo
7 hours ago
- Business
- Yahoo
An Extremely Profitable Business Plans to Go Public. What Investors Need to Know.
This company's revenue is growing at a high-double-digit percentage rate while commanding a compelling profit margin. This interesting cryptocurrency company will be worth watching as it makes its market debut. 10 stocks we like better than USDC › On May 27, Circle Internet Group updated its filings to become a publicly traded company. It's possible that investors haven't heard of Circle. But cryptocurrency enthusiasts are likely quite familiar with Circle's stablecoin USD Coin (CRYPTO: USDC), the second-largest stablecoin by market cap. A stablecoin is an interesting class of cryptocurrency. The price of Bitcoin (CRYPTO: BTC), for example, recently increase to an all-time high because its price changes relative to the U.S. dollar. It has a mechanism that controls the circulating supply of Bitcoins. And if demand exceeds this supply, then the price goes up. Stablecoins such as USDC don't work that way. Those wanting to use stablecoins can go to a cryptocurrency exchange such as Coinbase (NASDAQ: COIN). Once there, they deposit real dollars and exchange them for stablecoins. For every dollar they put in the system, a corresponding stablecoin is issued. This way, the price of each stablecoin should always be $1, rather than fluctuating like Bitcoin. Moreover, users should be able to exchange stablecoins back for dollars if and when they choose. Circle is a stablecoin issuer, and this business model can actually be extremely profitable. The costs to operating a stablecoin system are relatively low. Meanwhile, the stablecoin issuer needs to keep reserves in case users redeem their coins. These reserves turn into stable interest and investment income. The largest stablecoin entity is Tether, with a market value of more than $150 billion. It's not publicly traded, but it still reports financials from time to time. In the first quarter of 2025, it reported an operating profit of $1 billion, it had excess reserves of $5.6 billion, and its management is busily investing in other business ventures such as renewable energy. In other words, Tether seems to be a cash cow business with low need to reinvest in the business, freeing it to invest in other opportunities. This favorable stablecoin business model is why investors should keep an eye on Circle. Let's start with some concrete numbers. In the first quarter of 2025, Circle's total revenue rose 58% year over year to $579 million. And the company had operating income of $93 million, which was up 78%. That's good growth. And the table shows progress during the past three years. 2022 2023 2024 Revenue* $772 million $1.5 billion $1.7 billion Gross margin 60% 50% 39% Operating income ($38) million $270 million $167 million Data source: Circle's filings. Table by author. *Revenue from continuing operations. Circle had a Q1 operating margin of 16%, which is good. But the one thing apparent from the table is that the company has traded profitability for growth. Growth skyrocketed in 2023, whereas its gross margin took a significant step back. What gives? As it turns out, cryptocurrency exchange Coinbase helped launch USDC originally, so it's long had a vested interest. The company perceived that the stablecoin needed help, and so it reworked its partnership with Circle in 2023. Coinbase actively began pushing for USDC's growth while taking a larger cut of the profits. In other words, Circle would likely be far more profitable if it didn't partner with Coinbase. But otherwise, it might not be as big as it is today. It's something to be aware of, but the partnership is probably a net benefit. At the risk of oversimplifying things, high-growth, profitable businesses often make good investments. For this reason, I believe investors should watch Circle Internet Group stock once it goes public. But there are some risks to consider as well. First and foremost, Circle profits from user deposits. Although this is easy money, a lot of it has to do with interest rates, which are outside the company's control. Supposing rates trended lower, it would lower Circle's interest income. It's theoretically possible to see adoption go up and interest income go down. Second, as of this writing, Tether's market cap is $153 billion, according to CoinMarketCap, whereas USDC is only $61 billion. This suggests stablecoin users prefer Tether. In fact, without Coinbase's big push in 2023, it's debatable how big USDC would be. So it's fair to question the sustainability of its growth from here. Finally, legislation regarding stablecoins is always a concern. The current political atmosphere in Washington appears favorable to cryptocurrency. But the market could benefit from legislative clarity, and there's no guarantee which way things could go. However, taking this all into consideration, I believe that Circle stock could be a good long-term investment. This assumes that cryptocurrency adoption continues, Coinbase stays in its corner, and interest rates don't plunge overnight, which I believe are reasonable assumptions. For these reasons, I'll be watching Circle as it goes public. Before you buy stock in USDC, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and USDC wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy. An Extremely Profitable Business Plans to Go Public. What Investors Need to Know. was originally published by The Motley Fool
Yahoo
2 days ago
- Business
- Yahoo
What is a stablecoin, anyway? Circle's $6.7 billion IPO filing puts spotlight on crypto tokens pegged to the U.S. dollar
The issuer of USDC, a popular stablecoin that's pegged to the U.S. dollar, is officially launching an initial public offering. Circle Internet Group filed paperwork with the U.S. Securities and Exchange Commission on Tuesday to raise up to $624 million by offering 24 million shares to investors. Spicy AI-generated TACO memes are taking over social media because 'Trump always chickens out' Lego's first book nook is an addictively interactive diorama Forget quiet quitting: I'm using 'loud living' to redefine workplace boundaries With its IPO plans, New York-based Circle is hoping to put a lot of circles—well, zeros—behind its valuation, targeting up to $6.71 billion. Tuesday's filing has been long-awaited, as the company confidentially filed for an IPO in January 2024 after scrapping 2022 plans to go public via a merger with a special purpose acquisition company (SPAC). While more players in the crypto space have been diving into public markets in recent years, Circle's filing comes at pivotal timing amid a lot of interest in stablecoins. The company's biggest coin, USDC, is the seventh-largest cryptocurrency by market cap, according to CoinMarketCap, and second-largest stablecoin behind Tether. You may have been hearing more talk of stablecoins among investors and even the U.S. government. But what even is a stablecoin, anyway? If you're confused, read on for a complete breakdown of what you need to know. Stablecoins serve a much different role in the crypto space than the likes of Bitcoin or Ethereum, which can experience wild spikes in their prices. As the name suggests, stablecoins are intentionally stable in price because their value is pegged to an asset like the U.S. dollar. Both the Tether and USDC coins are pegged 1:1 to the U.S. dollar, meaning that for every unit of these cryptocurrencies in circulation, they're backed by $1 of cash or U.S. Treasury bonds. Their prices typically fluctuate only tiny fractions of a cent higher or lower than $1. Even amid Tuesday's IPO news, the price of USDC was essentially flat. Circle is also the issuer of EURC, which is pegged to the value of the euro. Given their price stability, stablecoins offer a valuable ballast to investors amid the volatility of crypto markets for investors. Once popular as a bridge between traditional and decentralized finance markets, there's been more interest in stablecoins as various countries around the world embrace cryptocurrencies. If you feel like you're hearing more about stablecoins lately, it's because they've been the topic of recent debate in the U.S. Senate. In February, Senator Bill Hagerty, a Republican from Tennessee, introduced the GENIUS Act, which would have classified stablecoins as securities under the jurisdiction of the SEC to establish regulatory guardrails for these coins. That Act would have brought a new layer of legitimacy to the crypto industry by bringing stablecoins into the regulated financial system. But the U.S. Senate voted earlier this month to block further advancement of the GENIUS Act, which was widely viewed as a significant setback for the industry. Once a skeptic, President Donald Trump has become a vocal proponent of cryptocurrencies, though some investors worry his support isn't helping. The $TRUMP meme coin launched just days before he returned to the office for his second term. In March, he voiced his support for legislation that provides regulatory certainty for stablecoins and has said he wants the U.S. to be the 'crypto capital' of the world. Even though stablecoins have been the topic of much debate in Washington, D.C. that's not likely to affect Circle's IPO. There's been a relative dearth of initial public offerings since an all-time record in 2021 and investors may be eager to hop aboard a new offering, particularly amid a broader market recovery. Circle has applied to list its stock on the New York Stock Exchange under the ticker symbol 'CRCL' and indicated that shares could be priced between $24 and $26. But there's no definitive timeline yet for when the stock could begin trading. This post originally appeared at to get the Fast Company newsletter:
Bloomberg
3 days ago
- Business
- Bloomberg
Beware Stablecoin Hype in Circle's $6 Billion IPO
A dollar is a dollar, whether spat out by an ATM or digitally issued on the blockchain. That's the promise of Circle Internet Group Inc., one of the biggest issuers of stablecoins designed to emulate fiat money like the greenback or the euro, primarily for the purpose of cryptocurrency trading. With hype around the mainstream potential of these tokens now at fever pitch, Circle's planned stock-market listing may yet raise questions over whether all dollars really are created equal. Circle's prospectus contains plenty of blockchain jargon but nonetheless tells the story of a relatively straightforward business model, somewhat similar to a money-market mutual fund. To fulfil its promise of a dollar-backed token that's redeemable at par, called USDC, Circle says it reinvests each dollar collected into liquid cash and cash equivalents. With about $60 billion worth of USDC in circulation and three-month US Treasury bills yielding an average of around 4.25% in the past six months, that generates a tidy revenue stream; together with various fees for things like transactions and redemptions, the company's revenue rose 16% to $1.7 billion last year.
Yahoo
3 days ago
- Business
- Yahoo
Stablecoin Giant Circle Files for IPO on NYSE
Circle Internet Group, the firm behind stablecoin USDC, has filed for an initial public offering on the New York Stock Exchange, the firm said on Tuesday. Circle is offering 24 million of its class A shares, out of which 9.6 million is being offered by the firm, while 14.4 million shares are being offered by selling stakeholders. It also expects to grant the underwriters a 30-day option to buy up to 3.6 million shares. The IPO price is expected to be between $24 and $26 per share. Based on the higher end of the range, Circle could raise almost $250 million, while the selling stakeholders could get nearly $375 million for their stake. Cathie Wood's ARK has expressed interest in buying $150 million worth of shares from the IPO, the USDC-issuer said in a filing. Cathie Wood's ARK Investment have indicated an interest in buying $150 million shares of the USDC-issuer from the IPO, Circle said in a filing. J.P. Morgan, Citigroup, and Goldman Sachs & Co. LLC are acting as joint lead active bookrunners for the offering. The stablecoin giant will trade under the ticker 'CRCL." The Jeremy Allaire-led firm has been trying to go public for almost 4 years. In 2021, Circle tried to go public through a special purpose acquisition company (SPAC), which later fell through. In April, the firm filed for an S-1 form with the Securities and Exchange Commission (SEC) in order to get listed. However, it was later reported that the USDC-issuer was looking to delay its IPO. Last week, Fortune reported that Circle also explored a $5 billion sale instead of going through the IPO route. It was also reported that listed crypto exchange Coinbase (COIN) and payments firm Ripple, which also has its RLUSD stablecoin, were among the (May 27, 11:47 UTC): Adds additional details on Circle's IPO (May 27, 12:50 UTC): Adds details on ARK UPDATE (May 27, 12:53 UTC): Adds details on ARK expressing interest in buying Circle shares from the IPO. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
3 days ago
- Business
- Bloomberg
BlackRock Is Said to Plan to Buy Shares in Circle Internet IPO
By and Anthony Hughes Save BlackRock Inc. plans to acquire about 10% of the shares offered in Circle Internet Group Inc. 's initial public offering, according to people familiar with the matter, as the worlds of traditional finance and cryptocurrency continue to deepen their ties. The stablecoin issuer and some of its shareholders including co-founder and Chief Executive Officer Jeremy Allaire are seeking to raise as much as $624 million in the offering, according to a US Securities and Exchange Commission filing Tuesday. Cathie Wood's Ark Investment Management has indicated an interest in buying as much as $150 million of shares in the offering, the filing shows.
