As stablecoin giant Tether continues to expand by offering to buy Juventus football club, some of its investors are trying to jump ship by selling their shares at a discount. This move has been blocked by the company, which wants to raise $20 billion and start tokenization.
Tether blocks share sales and seeks to raise $20 billion
While many crypto companies are trying to fit into the mold of traditional finance by making popular IPOs and applying for banking licenses, stablecoin leader Tether (USDT) is playing its part in private spheres and more emerging territories, with obvious success.
However, some of its investors are currently attempting to sell their shares at a price lower than the company’s estimated value of $500 billion. This amount puts 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 caused the company’s valuation to plummet 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 share sale.
As a result, these proceedings—involving at least one shareholder—have now been officially abandoned with “clear confirmation that these initiatives will not proceed.”
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 management.
Tether
On the agenda: share buybacks and tokenization
Following this case, 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 before the $20 billion fundraising round is finalized. The goal is to attract “strategic” investors, without specifying a timeline for a possible 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 worth no more than $18.5 billion, equivalent to the least valuable company in the Nasdaq 100 index.
By way of comparison, the market for tokenized private equity, such as Tether, is worth just over $400 million. This amount is less than 0.1% of the company’s claimed valuation.
