Circle Stock Takes a Hit as Company Prepares to Sell 10 Million Shares

Circle's stock price took a hit in premarket hours on Wednesday, falling over 4% after the company announced plans to sell 10 million shares. This development comes on the heels of a 425% surge in the company's stock value since its initial public offering (IPO) in June.

The sale includes 2 million Class A common shares and 8 million shares held by existing stockholders, as revealed in an SEC filing. Circle's revenue for the second quarter came in at $658 million, surpassing analyst expectations of $647 million. The company's stablecoin, USDC, saw significant growth, with a 90% year-over-year increase to $61.3 billion in circulation.

Circle's CEO Jeremy Allaire attributed the growth of USDC to its increasing use as a store of value and for cross-border settlements. He also announced plans for ARC, a new blockchain network aimed at stablecoin finance, set to launch in the second half of the year. The company's reserve income increased 50% year over year, driven by an 86% growth in USDC circulation.