Circle executives and VCs misjudged the market, losing $2 billion

Circle (stock code: CRCL) saw its share price soar after going public, but some executives and investors chose to cash out during the IPO, missing out on substantial potential gains.

As of June 6, 2025, the potential earnings missed by those who sold their shares in advance could reach up to $2 billion. They cashed out at a price of $29.30 per share, totaling about $270 million. However, if they had held on for a few more weeks, the value of their shares would have skyrocketed to billions.

Company executives have become one of the biggest "losers". The Chief Product and Technology Officer sold 300,000 shares of Class A common stock in the IPO, missing out on approximately $63 million in potential gains. The Chief Financial Officer also sold 200,000 shares at a price of $29.30 per share, resulting in a loss of about $42 million in potential gains.

Founder Jeremy Allaire was also not spared. He sold 1.58 million shares during the IPO, and if he had chosen to hold them at that time, he would now have an additional paper profit of up to $333 million.

Venture capital firms also missed a great opportunity. In Circle's IPO, venture capital firms, executives, and other insiders collectively sold at least 9.22 million shares of common stock. Although they realized a cash gain of $270 million, just two weeks later, the "opportunity cost" of this transaction was astonishing. If they had continued to hold these shares, they could have earned an additional $2 billion.

It is worth noting that some venture capitalists and executives have only reduced their holdings by a portion. A well-known venture capital firm has only sold about 10% of its CRCL shares and still holds more than 20 million shares. Founder Allaire also retains more than 17 million shares and has options and restricted stock. Many other venture capital firms and company executives have similarly retained a considerable proportion of their initial investments.

However, the decision to sell at $29.30 appears quite awkward against the backdrop of CRCL's stock price having surged to $240.28. While no one can predict the future, a prediction deviation of as much as 88% undoubtedly represents a major misjudgment and will leave a mark in financial history.

This event reveals a serious misjudgment of market expectations and reflects the cognitive differences between the primary and secondary markets in the emerging financial sector. When even the founder of a company cannot accurately predict the true value of their own stock, perhaps we should rethink: in this era filled with narrative-driven and emotion-driven fluctuations, who is the true wise investor?