Its plan to merge with a listed blank-check company called Concord Acquisition was scrapped by mutual consent on Monday.
Stablecoins, or stablecoins, are traded as a class of cryptocurrencies that offer stable and predictable value. For the companies that create them, just the opposite is true. Circle Internet Financial’s plan to merge with a listed blank-check company called Concord Acquisition was scrapped by mutual consent on Monday. Given that it’s impossible to value Circle right now, you’ve surely done the market a favor.
The company led by Jeremy Allaire planned to go public through a union with a SPAC (special purpose acquisition company), valuing it at 9,000 million dollars. However, 18 months after the initial announcement, Concord had still not received the necessary clearance from the SEC. Following the collapse of the FTX platform, the valuations of its listed counterparts have plunged; this year, Coinbase Global shares are down 80%.
These unknowns make the value of Circle anything but stable. The fact of going public now would also expose investors to other doubts that are difficult to assess. Several US lawmakers are drafting rules to regulate stablecoins amid much confusion in Congress. These rules could help Circle or hurt it. USD Coin is regulated by a New York financial watchdog, unlike its rival Tether, but it lacks the secure trust company structure of its competitors Gemini and Paxos. Circle could end up under the watchful eye of banking regulators, the SEC, or neither.
Circle boss Allaire could make a second public bid if these issues are resolved. The company has something that many tech companies lack: $43 million in quarterly profit, without the adjustments and alterations that abound in tech sector financial statements, is something that should appeal to public market investors, at least in more stable times.
