Circle’s public debut has drawn criticism from high-profile investors, especially over how early employees may have missed out on nearly $3 billion in unrealized gains.

Billionaire venture capitalist Chamath Palihapitiya noted that Circle insiders sold 14.4 million shares at the Initial Public Offering (IPO) price of $31 each, securing roughly $446 million. However, with the stock now trading above $240, the same shares would currently be worth around $3.45 billion.

Circle IPO Leaves Billions on the Table for Early Employees

The difference marks a nearly $3 billion gap, which Palihapitiya described as a costly misstep caused by the choice of a traditional IPO route.

He noted that underwriters purchased the insider shares and redistributed them to select clients, leaving original shareholders with limited upside.

In his view, the employees essentially handed over billions in value to outside investors who had no role in Circle’s success.

“In this case, it was a $3 billion gift from the employees and investors of Circle to people they don’t know, will never know and have nothing to do with their journey,” Palihapitiya said.

Palihapitiya argued that the situation might have played out differently if Circle had chosen a special purpose acquisition company (SPAC) merger or a direct listing.

These alternative routes often give insiders more control over pricing, timing, and disclosures, helping them retain more value during a public transition.

He added that SPACs and direct listings disclose valuation dynamics more clearly and can be structured to benefit both sellers and buyers.

“To be clear, this method of value transfer doesn’t happen via a direct listing or SPAC – the benefits in SPACs and DLs are disclosed very explicitly up front. They can be negotiated, minimized etc to the benefit of selling shareholders and buying shareholders,” he added.

Circle had previously planned to go public via a SPAC merger with Concord Acquisition Corp, but canceled the deal in 2022. The company later pursued a traditional IPO, which, while successful, appears to have left early stakeholders with regrets.

CRCL Surges as Stablecoin Confidence Grows

Despite the controversy, Circle’s performance in public markets has been remarkable.

Its stock, now trading under the ticker CRCL, has surged more than 675% since its $31 debut, reaching a peak of $248 per share on June 20. That puts the company’s market capitalization at around $58 billion, signaling strong investor confidence in the firm’s future.

Jon Ma, CEO of blockchain analytics firm Artemis, noted that Circle is trading at valuation multiples well above those of Coinbase and Robinhood, despite those firms reporting higher net income.

“Circle now trades for: 24.2x [its] Q1’25 revenue run rate, 60.7x Q1’25 gross profit run rate [and] 216x Q1’25 net income run rate,” Ma pointed out.

According to him, the premium likely reflects investor belief in Circle’s future growth and potential regulatory advantage.

A key factor behind that optimism is the recent passage of the GENIUS Act in the Senate—a bipartisan bill designed to bring stablecoin clarity to the US market. The legislation, backed by President Donald Trump, still needs approval from the House and a final signature.

If passed, it could solidify Circle’s regulatory footing, reinforcing its dominance in the stablecoin sector and helping justify its soaring stock price.