Why an acquisition of Circle may be off the table as its IPO approaches
Jay Woods, Chief Global Strategist at Freedom Capital Markets, said it would be “very rare” for an acquisition to happen since the IPO may occur as soon as next week
Circle and DigitalSand/Shutterstock and Adobe modified by Blockworks
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The stablecoin company Circle is a highly anticipated IPO, and we know now that BlackRock’s very interested, per a Bloomberg report, and we have an idea behind potential pricing. This one is an interesting hybrid of crypto and TradFi.
On Tuesday, I wrote that the stablecoin issuer is really close to the finish line, but I hadn’t realized just how close until I caught up with Jay Woods, Chief Global Strategist at Freedom Capital Markets.
I know Woods from my days as a reporter on Wall Street, and he’s quite familiar with the ins and outs of IPOs, having worked on the floor of the New York Stock Exchange for many years.
First of all, let’s address the rumors of a potential acquisition ahead of the IPO: Woods told me it’s “very rare” for that to happen at this stage.
“We are at a point where the bankers have been named, the price has been set, and a timetable has been given. The timetable is for the week of June 2, so that’s next week. Once you get this far along in the process, I can’t think of anything off the top of my head … where a company has not made it to the finish line,” he said.
Basically, the banking teams have done their due diligence, investors have been talked to, and everything is humming along.
“So to me, unless somebody comes in with a ridiculous offer and wants to stop this from happening and buy them before they go public, it looks like they’re a go. And we’ve got another, say, 10 trading days or less to figure it out,” Woods added.
Generally speaking, you don’t see IPOs on Mondays or Tuesdays. In my experience, Thursday seems to be a popular pick for companies.
While Woods wasn’t totally sure why Thursday seems to be such a hit, he did note that it gives the teams three days to prep for the IPO and then one full day of trading (at least) before the weekend. But that’s not to say we couldn’t also see Circle go public next Wednesday.
We’ll know pretty quickly next week what the timeline will be, given that we get pricing the night before the stock opens for trading. So, we’ll get pricing Tuesday night if they aim for Wednesday, and Wednesday night if they choose Thursday.
I asked Woods for a read on the market conditions to give a better sense of how the IPO could fare, and he noted that the overall conditions are starting to get better, though they’re not necessarily ideal. But, hey, retail is definitely interested and so, clearly, are institutions.
ICYMI: In that SEC filing from earlier this week, Circle noted that Cathie Wood’s ARK had expressed interest in purchasing up to $150 million in shares.
What will be interesting to see is the appetite for the stock, especially amongst crypto folks. COIN is clearly a popular pick nowadays, but can CRCL join it?
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