Jeff Dorman, Chief Investment Officer at Arca, has voiced dissatisfaction over the low allocation of CRCL shares his firm received from the highly subscribed initial public offering (IPO) of Circle. The New York Stock Exchange listed Circle Internet Group recently, marking one of the most successful public debuts of the year. Circle and its executives, including CEO Jeremy Allaire, sold 34 million IPO shares at $31 each, raising over $1 billion.
The shares, denoted as CRCL, opened at $69 and are currently trading over $85, a rise of over 175%. They even touched a high of $90 on the debut day. Arca had placed an order for $10 million in CRCL shares on the very first day of Circle’s roadshow. However, they received only a $135,000 allocation, which is 1.35% of the intended investment.
In a public letter, Dorman criticised Circle’s decision to give larger allocations to traditional finance mutual funds and hedge funds, who, according to him, probably didn’t go through the prospectus and have no wallets or product use. Circle’s round was oversubscribed and upsized at least twice. As is typical in such situations, investors sometimes do not get their promised allocations.
Dorman stated in his letter that Arca has been a long-term customer and occasional partner of Circle. He expressed disappointment over Circle’s decision and announced that Arca would close its Circle accounts and switch to competing stablecoins like USDT.
Circle is the second crypto-only firm to go public in the U.S., following Coinbase, which went public through a direct listing in 2021. Circle had planned a SPAC merger to go public, but it was cancelled due to the 2022 market downturn.
