Tether bars discounted stock sales to protect $500B valuation

Tether Holdings SA intervened to stop at least one existing shareholder from selling stock at a discount while it seeks up to $20 billion at a $500 billion valuation, Bloomberg reports. The company is evaluating buybacks and a tokenized version of its shares to give investors liquidity after the round.

According to anonymous sources cited by Bloomberg, Tether acted after learning of plans to unload stock at a steep markdown to the targeted valuation during the fundraising. Executives are studying company-led repurchases and issuing a blockchain-based representation of equity once the deal closes.

In a statement, the company noted it had “received clear confirmation that these efforts will not proceed.” It added: “It would be imprudent, and indeed reckless, for any investor to attempt to circumvent the established process led by Tier 1 global investment banks or to engage with parties not authorized by Tether’s management.” The would-be sellers were not identified.

At least one shareholder sought to sell $1 billion or more of stock at a price implying a $280 billion valuation, according to people familiar with the talks and investor materials. It was not clear whether that figure factored in proceeds from any new capital.

Existing holders are not expected to sell shares in the primary round, per one person with knowledge of the plan. Management has aimed to avoid discounted secondary trades while courting “strategic” backers, and has held discussions with SoftBank Group and Ark Investment Management. The company has not provided a timeline for an initial public offering.

Tether’s USDT stablecoin has about $186 billion in circulation. Internal projections point to roughly $15 billion in profit this year, according to people familiar with those forecasts.

The company is also weighing tokenization, a method that represents assets such as shares, bonds, bank deposits, or real estate on a blockchain to speed settlement and reduce costs. Several firms have piloted tokenized equity, including a version of Galaxy Digital Inc.’s Nasdaq-listed shares that trades on the Solana blockchain, along with initiatives tied to Kraken and Robinhood Markets Inc.

Tether launched its Hadron tokenization platform in November 2024 to convert assets including stocks, bonds, and commodities into digital tokens. Industry data places the value of blockchain-traded tokens linked to real-world assets at about $18 billion, roughly comparable to the smallest company in the Nasdaq 100 Index.

Separately, Tether investor Blockchain Capital considered selling part of its stake before the fundraising plan became public, then opted not to proceed, according to a person with knowledge of the matter. That person indicated Tether did not attempt to block that potential sale.

While it evaluates post-deal liquidity options, the company is continuing the capital raise at the targeted valuation and is directing investor engagement through its appointed banking partners. Tether did not provide details on the timing of the fundraising or on potential secondary arrangements.

As we wrote previously, S&P Global Ratings cut its stability assessment of Tether’s stablecoin to “weak,” saying reserves had become riskier as holdings of bitcoin, gold, secured loans, and corporate bonds increased, and noting limited visibility into reserve management and key counterparties. 

Tether CEO Paolo Ardoino criticized the methodology, arguing traditional bank-focused models miss how crypto firms operate, what data they publish, and how quickly balance sheets change, and he noted such models previously supported high ratings for institutions that later ran into trouble.