Circle stock jumps 15% after $222M ARC presale
Circle shares rose 15% to close at $131.76 after Q1 revenue of $694 million and disclosure of a $222 million presale of its ARC token.
Circle’s shares rose about 15% Monday, closing at $131.76 after the company reported first-quarter revenue and disclosed a $222 million presale of its ARC token. Intraday gains approached 16% before some of the advance was pared in after-hours trading. The close was the highest since March 18. Shares are up about 66% year to date, giving Circle an approximate market value of $35 billion.
Circle reported USDC stablecoin circulation of $77 billion at the end of the first quarter, a 28% increase from a year earlier. First-quarter revenue rose 20% year over year to $694 million. Adjusted earnings increased 24% to $151 million.
The company said it raised $222 million in an ARC token presale that values the Arc project at about $3 billion. Circle described ARC as a blockchain-based utility token intended to support transactions on the Arc network. Participants in the presale included a16z Crypto and a consortium featuring BlackRock, Apollo Global Management and ARK Invest.
On the earnings call, Circle CEO Jeremy Allaire described the Arc network and ARC token as creating a “huge flywheel effect” for the company’s stablecoin and other digital assets.
Analysts reacted positively to the results and the ARC presale. Citigroup’s Peter Christiansen has a 12-month price target of $243 and Bernstein’s Gautam Chhugani has a $190 target. TipRanks shows roughly a dozen tracked analysts rating the stock a buy. Andrew Jeffrey of William Blair warned that shares will probably remain volatile but highlighted Circle’s “significant stablecoin commerce advantage.” Dan Dolev of Mizuho said Circle is finding new use cases for stablecoins beyond trading.
Market participants will track USDC expansion, the rollout and adoption of the Arc network, and how ARC token economics interact with Circle’s payments and custody services as indicators for future company performance.
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