Criticism of Circle’s IPO Allocation
The Circle has come under fire from Jeff Dorman, the chief investment officer at Arca, a digital asset investment firm, regarding a $135,000 allocation to the company during a recent initial public offering (IPO) by the Stablecoin issuer.
In a letter shared on social media, Dorman criticized Circle’s leadership for what he viewed as poor judgment, describing the allocation as “inappropriate.” He also declared that Arca would close all accounts with Circle as a result.
Dorman pointed out that Arca was permitted to take part in only $135,000 of a $10 million order during the offering. He noted that Arca was one of the early entities to submit an offer and has been a long-time supporter of Circle, despite ongoing concerns that the company may postpone its IPO plans due to macroeconomic issues.
“Arca has faced struggles for the past eight years, just like every other company from code. Most of us stick together to support one another. I can’t believe the efforts you can put forth, yet you give us abandoned assignments,” he wrote.
He added, “Most of Arca’s management team left Wall Street eight years ago, founding a code-native company to escape the likes of you. Ironically, you’ve essentially become a part of that circle,” further emphasizing his disappointment.
Dorman also mentioned that Arca has officially closed all accounts with Circle, advising other companies to reconsider partnerships with the Stablecoin giant.
Circle recently went public, listing on the New York Stock Exchange (NYSE) on June 5. It is seen by many industry experts as a significant development in the crypto sector, being the issuer of the second-largest stablecoin by market capitalization.
IPO Targets Adjusted
Circle kicked off its IPO on May 27, initially targeting 24 million shares. The company issued 9.6 million Class A common stock, with existing investors contributing the remaining 14.4 million shares.
On June 2, Circle raised its IPO target to 32 million shares to secure $892 million. Just two days later, on June 4, it again increased its target, this time to 34 million shares in pursuit of $1.055 billion. Following its debut on the NYSE, the company’s shares surged over 200% in the early hours of trading.
