As stablecoin giant Tether continues to expand by proposing to buy the Juventus soccer club, some of its investors are trying to jump ship by selling their shares at a discount. The company has blocked this move, as it aims to raise $20 billion and launch a tokenization initiative.
Tether blocks stock sales and seeks to raise $20 billion
While many crypto companies are trying to fit into the mold of traditional finance by conducting high-profile IPOs and applying for banking licenses, the leading stablecoin Tether (USDT) is playing its part in private spheres and in more emerging markets, with clear success.
However, some of its investors are reportedly currently attempting to sell their stakes at a price lower than the company’s estimated $500 billion valuation. This valuation places Tether in the VIP club of the world’s most valuable private companies.
In fact, one shareholder reportedly attempted to sell at least $1 billion worth of shares at a price that would have sent the company’s valuation plummeting below $300 billion. These developments, reported by Bloomberg, come at the worst possible time, as the company is simultaneously seeking to raise $20 billion through a stock sale.
As a result, these proceedings—involving at least one shareholder—have just been officially abandoned with “clear confirmation that these initiatives will not proceed further.”
It would be imprudent—and even reckless—for any investor to attempt to circumvent the established process, led by top-tier global investment banks, or to deal with parties not authorized by Tether’s management.
Tether
On the agenda: share buyback and tokenization
Following this matter, Tether is reportedly exploring more effective ways to ensure better liquidity for its investors. The solutions chosen could take the form of a share buyback, but also the implementation of a tokenization program.
In any case, no decision will be made until the $20 billion fundraising round is finalized. The goal is to attract “strategic” investors, though no timeline has been set for a potential IPO. This means that “both new and existing investors may have to wait years before they can exit.”
The company already has the necessary infrastructure for tokenizing stocks and bonds, with its Hadron platform launched last November. However, this tokenization market—which has tripled in size over the past year—is currently valued at no more than $18.5 billion, equivalent to the least valuable company on the Nasdaq 100 index.
Market shares in the tokenization sector
By way of comparison: the market for tokenized private equity, such as Tether’s, is worth just over $400 million on its own. This amount does not even amount to 0.1% of the valuation claimed by the company.
