Tether Considers Tokenizing Stock Amid $20 Billion Fundraise: Bloomberg
TL;DR
Tether is considering tokenizing its stock to provide investor liquidity and prevent equity sales at lower valuations, as it aims to raise $20 billion at a $500 billion valuation. This move could position it among the world's most valuable private companies, with potential investments from firms like SoftBank.
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Stablecoin issuer Tether may tokenize its stock after taking action to prevent investors from selling equity in the crypto giant, Bloomberg News reported on Friday.
The private company’s executives are weighing tokenized representations of its shares as a way to provide liquidity to Tether’s investors, as well as buybacks, according to people familiar with the matter. Meanwhile, Tether is trying to raise $20 billion at a $500 billion valuation, the publication said.
A shareholder, which Bloomberg couldn’t identify, was interested in selling at least $1 billion worth of equity in Tether at a $280 billion valuation. The company’s management was reportedly concerned that sales at a lower valuation could hamstring Tether’s fundraising efforts.
In a statement to Bloomberg, a spokesperson said that “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 firm has confidence that any associated efforts “will not proceed,” the spokesperson added.
Decrypt has reached out to Tether for comment.
The valuation that Tether is seeking would put it on par with OpenAI and SpaceX, according to estimates from private market pricing data provider Forge, placing it among the most valuable private companies in the world.
Tether’s closest competitor, Circle, went public in June at a $6.9 billion valuation, a move that sparked intrigue on Wall Street prior the passage of stablecoin legislation this summer. On Friday, Circle shares fell 2.3% to $86, according to Yahoo Finance.
Tether earns income from reserves backing its USDT stablecoin, which was recently worth roughly $186 billion, according to CoinGecko. Over the past year, that footprint has grown by $46 billion. Circle’s USDC, meanwhile, was recently worth around $78 billion.
Japanese multinational SoftBank and Ark Investment Management are among companies considering an investment in Tether, Bloomberg reported in September. Still, the stablecoin issuer hasn’t given a timeframe yet for a potential public offering.