WEBVTT 1 00:00:00.785 --> 00:00:03.495 Hello and welcome to this Vidcast, which is diverted 2 00:00:03.495 --> 00:00:06.975 to a company operating in a cryptocurrency industry 3 00:00:07.435 --> 00:00:10.855 and which realized very recently an extremely successful 4 00:00:11.215 --> 00:00:12.415 IPO circle. 5 00:00:14.535 --> 00:00:18.975 A few weeks ago on the 27th of May, 2025, the company 6 00:00:19.575 --> 00:00:22.015 communicated a rage for the issue prize, 7 00:00:22.225 --> 00:00:24.895 which was supposedly happening a few days later. 8 00:00:25.435 --> 00:00:29.135 The range was 25 to 26 US dollars 9 00:00:30.095 --> 00:00:32.015 a week later, the 4th of June, 10 00:00:32.435 --> 00:00:35.935 the final issue prize is announced $31, 11 00:00:35.935 --> 00:00:40.615 which is about 20% more than the upper part of the range. 12 00:00:41.315 --> 00:00:44.375 At the end of the day, two days later, the 6th of June, 13 00:00:44.675 --> 00:00:48.255 the opening price is not going to be 31, it's going 14 00:00:48.255 --> 00:00:49.335 to be 96. 15 00:00:50.035 --> 00:00:54.815 The highest is going to be achieved during this day at 124, 16 00:00:54.905 --> 00:00:58.095 which is exactly four times the issue price. 17 00:00:58.565 --> 00:01:00.335 Then there will be a small decline 18 00:01:00.635 --> 00:01:04.055 and the stock price will close at 107.7, 19 00:01:04.505 --> 00:01:09.055 which is plus 247% against the 20 00:01:09.185 --> 00:01:11.175 issue price of $31. 21 00:01:13.175 --> 00:01:16.065 When the closing price at the end of the first day 22 00:01:16.065 --> 00:01:18.865 of listing represents more than three times as much 23 00:01:18.885 --> 00:01:21.745 as the issue price, you can directly conclude 24 00:01:21.745 --> 00:01:25.385 that it was a very significant underpricing in the process. 25 00:01:26.365 --> 00:01:30.545 For June 6th Circle high PO leaves more than 26 00:01:30.725 --> 00:01:33.425 $1.7 billion on the table. 27 00:01:34.135 --> 00:01:38.025 Seven's biggest underpricing indicates in fact, 28 00:01:38.025 --> 00:01:40.945 when you calculate 34 million shares offered to the market 29 00:01:41.525 --> 00:01:44.265 and you multiply that by the difference 96, 30 00:01:44.555 --> 00:01:45.825 which is the opening price 31 00:01:45.965 --> 00:01:49.585 and 31 which is the issue price, you even get $2.2 billion 32 00:01:50.575 --> 00:01:54.185 seven's biggest underpricing in the list rivian 33 00:01:54.725 --> 00:01:58.505 for the car industry, 2.6 billion snowflake, top 34 00:01:58.505 --> 00:02:01.705 of the list number one, $3.7 billion. 35 00:02:02.445 --> 00:02:04.825 But if you remember the film which was produced 36 00:02:04.845 --> 00:02:07.945 by the academy about the IPO of Snowflake, 37 00:02:08.365 --> 00:02:13.025 the opening market cap is 50 years of revenues. 38 00:02:13.365 --> 00:02:16.345 The closing market cap at the end of the first day 39 00:02:16.345 --> 00:02:19.825 of listing is 100 years of revenues, 40 00:02:20.115 --> 00:02:21.905 which is extremely high. 41 00:02:22.405 --> 00:02:25.225 Of course, later on there would be some disappointment. 42 00:02:27.845 --> 00:02:29.185 Of course there was a mistake, 43 00:02:29.285 --> 00:02:32.865 but it's always much easier to predict the path than 44 00:02:33.085 --> 00:02:34.345 to anticipate the future 45 00:02:35.205 --> 00:02:38.105 and it's quite easy to understand as well 46 00:02:38.695 --> 00:02:41.945 that making the financial analysis a financial valuation 47 00:02:41.945 --> 00:02:45.705 of a company operating in a cryptocurrency business 48 00:02:45.885 --> 00:02:49.105 and trying to anticipate the reactions 49 00:02:49.105 --> 00:02:51.985 of the investors is extremely difficult, 50 00:02:52.355 --> 00:02:55.865 especially those days when the cryptocurrency industry is 51 00:02:56.905 --> 00:02:59.225 volatile and quite unpredictable. 52 00:03:01.615 --> 00:03:03.925 There were two objectives in this IPO. 53 00:03:04.345 --> 00:03:07.005 The first one, traditional is about financing growth, 54 00:03:07.625 --> 00:03:09.805 but the second one is providing an exit 55 00:03:09.825 --> 00:03:11.725 to some historical called investors, 56 00:03:12.055 --> 00:03:14.605 which were absolutely significant in the financing 57 00:03:14.605 --> 00:03:15.965 and development of the company. 58 00:03:16.825 --> 00:03:19.685 So 34 million shares were offered to the market. 59 00:03:20.685 --> 00:03:23.285 14.8 million were issued 60 00:03:23.585 --> 00:03:27.245 and sold against cash at $31 per share. 61 00:03:27.385 --> 00:03:30.845 It represents $460 million cash in 62 00:03:30.845 --> 00:03:31.965 the bank account of the company. 63 00:03:33.325 --> 00:03:38.045 19.2 million shares were sold from investors, 64 00:03:38.455 --> 00:03:40.405 which had been so significant in the 65 00:03:40.405 --> 00:03:41.445 development of the company. 66 00:03:41.825 --> 00:03:44.485 So you provide an exit, a partial exit to 67 00:03:44.705 --> 00:03:46.565 for example Goldman Sachs. 68 00:03:48.945 --> 00:03:51.425 A few dates are quite important in the history circle. 69 00:03:51.575 --> 00:03:55.945 Further creation in 2013 by Jeremy Allaire and Sean Neville. 70 00:03:56.725 --> 00:04:00.665 In 2015, they obtained a bid license for the company name 71 00:04:01.125 --> 00:04:03.065 and what's interesting is that they decide 72 00:04:03.065 --> 00:04:05.665 to operate from the New York state, which is very well known 73 00:04:06.005 --> 00:04:09.305 for a strict regulation for cryptocurrencies. 74 00:04:09.925 --> 00:04:14.785 Strict regulation means resilience, transparency, quality 75 00:04:15.085 --> 00:04:16.905 and robustness of execution. 76 00:04:17.245 --> 00:04:18.825 At the end of the day, trust 77 00:04:19.005 --> 00:04:21.345 for the stakeholders very important point. 78 00:04:22.165 --> 00:04:26.745 In 2016, they start and stop circle pay and application. 79 00:04:26.975 --> 00:04:28.505 They launch under withdraw, 80 00:04:28.685 --> 00:04:32.145 but the turning point is 2018 when the consortium is 81 00:04:32.385 --> 00:04:36.145 launching a stable coin, which is based backed 82 00:04:36.145 --> 00:04:37.185 by the US dollar. 83 00:04:37.725 --> 00:04:39.345 The name of the consortium is center. 84 00:04:39.685 --> 00:04:42.905 The two main actors are circle and coin base 85 00:04:42.965 --> 00:04:46.065 and the name of the stablecoin is USDC. 86 00:04:46.565 --> 00:04:49.505 Now going to share the governance up to 2023. 87 00:04:50.125 --> 00:04:51.705 Now circle either one 88 00:04:51.765 --> 00:04:55.185 and unique company in charge of full governance 89 00:04:55.245 --> 00:04:56.305 of the stable coin. 90 00:04:58.765 --> 00:05:02.335 What is a stable coin? First, it's a cryptocurrency. 91 00:05:02.845 --> 00:05:05.535 It's a digital currency which is mobilizing 92 00:05:05.535 --> 00:05:07.655 and using the blockchain technology. 93 00:05:08.835 --> 00:05:11.015 The Bitcoin is also a cryptocurrency, 94 00:05:11.155 --> 00:05:14.455 but the value of the Bitcoin depends on the evolution 95 00:05:14.455 --> 00:05:15.615 of supply and demand. 96 00:05:16.365 --> 00:05:18.175 It's not the case for a stable coin. 97 00:05:18.235 --> 00:05:20.895 It drags the evolution of a reference currency. 98 00:05:21.365 --> 00:05:24.015 It's pegged to the evolution of the reference currency. 99 00:05:24.635 --> 00:05:27.335 In this case it's a US dollar, but it might be the Euro 100 00:05:27.675 --> 00:05:29.935 or any robust robust currency. 101 00:05:30.555 --> 00:05:35.215 The objective is to facilitate secure transactions secure 102 00:05:35.215 --> 00:05:37.615 because of blockchain and facilitate 103 00:05:37.615 --> 00:05:41.255 because you can exchange US dollars without holding them. 104 00:05:41.755 --> 00:05:45.455 You hold something which looks like something which follows, 105 00:05:45.455 --> 00:05:47.295 which tracks the US dollars. 106 00:05:47.955 --> 00:05:49.775 As far as the US dollar is concerned, 107 00:05:49.775 --> 00:05:52.975 there are two main players for stable coins. 108 00:05:53.515 --> 00:05:54.855 Tether is the largest one. 109 00:05:55.355 --> 00:05:57.485 The name of the stable coin is USDT 110 00:05:57.825 --> 00:06:00.365 and the capitalization is $110 billion. 111 00:06:00.785 --> 00:06:02.965 Circle is number two with USDC 112 00:06:03.305 --> 00:06:06.605 and with $60 billion of capitalization, 113 00:06:07.145 --> 00:06:10.685 but the reputation of circle is to be much more transparent 114 00:06:11.145 --> 00:06:13.485 and regulated than its competitor. 115 00:06:16.315 --> 00:06:19.195 Probably the main challenge which is met by 116 00:06:19.715 --> 00:06:21.555 companies operating in a stable con business 117 00:06:22.295 --> 00:06:25.555 is a combination of convertibility and liquidity. 118 00:06:26.395 --> 00:06:30.475 A token A-U-S-D-C is worth by construction $1. 119 00:06:31.015 --> 00:06:34.035 So if for example, you want to buy a token which is created 120 00:06:34.375 --> 00:06:36.555 by circle, you are going 121 00:06:36.555 --> 00:06:40.395 to buy one token created against cash 122 00:06:40.575 --> 00:06:41.675 of $1, 123 00:06:42.535 --> 00:06:46.435 but you may be also motivated of doing the other way around. 124 00:06:46.775 --> 00:06:49.355 So you want to convert the token which you hold into cash 125 00:06:49.775 --> 00:06:51.795 and then you are going to ask maybe to circle 126 00:06:52.455 --> 00:06:53.835 to do the conversion. 127 00:06:53.965 --> 00:06:55.315 There will be a bank transfer 128 00:06:55.335 --> 00:06:58.275 and you are going to get your money back maybe minus some 129 00:06:58.305 --> 00:07:00.835 fees, but in order to do so, 130 00:07:01.135 --> 00:07:04.835 the USD must be available in the bank account of C 131 00:07:05.615 --> 00:07:08.435 and then you can enter the liquidity of the tokens, 132 00:07:08.695 --> 00:07:12.035 the liquidity of the USDC as a stable coin. 133 00:07:12.785 --> 00:07:15.435 Then you understand that the cash which is held 134 00:07:15.575 --> 00:07:16.675 by circle has 135 00:07:16.675 --> 00:07:20.195 to be invested in assets which are risk-free and liquid. 136 00:07:20.785 --> 00:07:24.115 Sometimes there are some unpleasant surprises. 137 00:07:24.695 --> 00:07:27.635 You remember the bank, Silicon Valley Bank, very well known 138 00:07:27.635 --> 00:07:30.915 for investing its cash in risk-free assets such 139 00:07:30.915 --> 00:07:33.715 as long-term US government bonds and so on 140 00:07:33.715 --> 00:07:36.915 and so forth Because of evolution of interest rate 141 00:07:37.015 --> 00:07:40.195 and mark to market accounting SVB went bankrupt, 142 00:07:40.815 --> 00:07:44.195 but there were $3.3 billion of circle cash 143 00:07:45.355 --> 00:07:46.995 invested in SVB 144 00:07:47.855 --> 00:07:52.035 and so during a short period of time, the company circle had 145 00:07:52.035 --> 00:07:54.795 to interrupt the conversion up 146 00:07:54.795 --> 00:07:57.435 to the moment when a financial institution 147 00:07:57.915 --> 00:08:01.835 provided a warranty on the assets of SVB. 148 00:08:02.065 --> 00:08:03.635 That was quite unpleasant 149 00:08:03.855 --> 00:08:06.195 and a risky moment for the stakeholders 150 00:08:09.035 --> 00:08:10.415 in order to meet the challenge 151 00:08:10.435 --> 00:08:13.095 and the requirements of convertibility and liquidity. 152 00:08:13.105 --> 00:08:14.535 There are different backing methods. 153 00:08:15.435 --> 00:08:18.495 The one which is quite resilient and robust 154 00:08:18.675 --> 00:08:21.455 and the one which I described is about fiat money. 155 00:08:21.835 --> 00:08:24.015 So you hold as much fiat currency 156 00:08:24.435 --> 00:08:27.775 as tokens you have issued created 157 00:08:28.355 --> 00:08:30.655 10 billion tokens at $1 each. 158 00:08:30.955 --> 00:08:33.695 You hold $10 billion in your bank account. 159 00:08:34.555 --> 00:08:36.455 Its name Fiat collateralized. 160 00:08:37.245 --> 00:08:39.935 Another way to do the same thing is 161 00:08:39.935 --> 00:08:41.935 to hold another cryptocurrency, 162 00:08:41.935 --> 00:08:44.815 which its itself is fiat collateralized 163 00:08:45.355 --> 00:08:49.055 and then this other cryptocurrency serves as a kind 164 00:08:49.055 --> 00:08:50.615 of intermediary collateral. 165 00:08:50.995 --> 00:08:53.135 Its name crypto collateralized. 166 00:08:54.205 --> 00:08:56.005 Some stable coins are not 167 00:08:56.005 --> 00:08:58.645 that stable I would say they are backed 168 00:08:58.665 --> 00:09:00.725 by algorithmic backing 169 00:09:01.305 --> 00:09:03.005 and it corresponds to a kind 170 00:09:03.005 --> 00:09:05.165 of adjustment supply demand adjustment, 171 00:09:05.165 --> 00:09:06.765 which is extremely risky. 172 00:09:07.025 --> 00:09:11.585 We have terrible examples about that as far 173 00:09:11.605 --> 00:09:15.105 as US backed stable coins are concerned, 174 00:09:15.645 --> 00:09:18.905 the big accident is May, 2022. 175 00:09:19.605 --> 00:09:23.185 The name of stable coin is UST and it's backed by terror. 176 00:09:23.775 --> 00:09:26.185 It's about algorithmic stable coin. 177 00:09:26.735 --> 00:09:28.945 Then there was an arbitrage mechanism 178 00:09:29.015 --> 00:09:32.265 with another cryptocurrency, which is named Luna. 179 00:09:33.245 --> 00:09:35.505 Not getting into the detail what happened, 180 00:09:35.565 --> 00:09:36.745 but there was a panic. 181 00:09:37.115 --> 00:09:41.145 There was a UST sell off massive Luna dilution 182 00:09:41.445 --> 00:09:45.705 and value destruction evaporated $45 billion 183 00:09:46.465 --> 00:09:48.385 consequences, loss of trust, 184 00:09:48.395 --> 00:09:53.185 especially in non collateralized algorithmic stable coins. 185 00:09:55.825 --> 00:09:58.085 The value distraction, the evaporation 186 00:09:58.085 --> 00:10:02.285 of $45 billion is not the only negative consequence 187 00:10:02.285 --> 00:10:04.765 of the accident of terra UST. 188 00:10:05.295 --> 00:10:07.125 There is another collateral damage, 189 00:10:07.125 --> 00:10:12.085 which is the unsuccessful IPO of circle via a spac, 190 00:10:12.285 --> 00:10:14.525 a special purpose acquisition company. 191 00:10:15.105 --> 00:10:19.725 The company wanted to go public merger IPO agreement 192 00:10:19.835 --> 00:10:24.725 with Concord in 2021 based on the valuation of $4.5 billion 193 00:10:25.545 --> 00:10:26.645 in 2022. 194 00:10:26.695 --> 00:10:29.325 There is a renegotiation in February 195 00:10:29.475 --> 00:10:32.165 because the value of circle is skyrocketing. 196 00:10:32.515 --> 00:10:34.485 $9 billion is a new value, 197 00:10:35.145 --> 00:10:38.685 but when you want to go public, you need to propose some 198 00:10:39.245 --> 00:10:42.125 documents which have to be validated by the Securities 199 00:10:42.265 --> 00:10:43.845 and Exchange Commission and 200 00:10:43.845 --> 00:10:48.245 because of the accident in May, 2022, the SEC is extremely 201 00:10:48.885 --> 00:10:52.085 skeptical and ous, there is a collapse of terror, 202 00:10:52.185 --> 00:10:56.085 but there is a collapse of so of FTX and so on and so forth, 203 00:10:56.665 --> 00:10:58.285 but they are going to extend the 204 00:10:58.525 --> 00:10:59.925 deadlines and so on so forth. 205 00:10:59.985 --> 00:11:01.405 At the end of it as a project is going 206 00:11:01.405 --> 00:11:04.925 to be abundant in December, 2022. 207 00:11:07.235 --> 00:11:08.695 Now we are in 2025 208 00:11:09.195 --> 00:11:12.415 and the IPO of circle is a huge success, 209 00:11:12.795 --> 00:11:15.695 but the company is sending two messages to the investors. 210 00:11:16.315 --> 00:11:18.415 The first one is a mission statement of the company. 211 00:11:18.715 --> 00:11:22.335 We want to raise global economic prosperity, frictionless 212 00:11:23.015 --> 00:11:24.215 exchange of value. 213 00:11:24.835 --> 00:11:27.215 We facilitated very much these transactions 214 00:11:27.515 --> 00:11:30.055 and at the end of the day there is a positive impact on 215 00:11:30.335 --> 00:11:31.775 economic growth and prosperity, 216 00:11:32.435 --> 00:11:33.815 but there is a second message. 217 00:11:35.405 --> 00:11:37.665 The second message is very much about safety. 218 00:11:38.245 --> 00:11:39.505 Of course it's a cryptocurrency. 219 00:11:39.615 --> 00:11:41.905 It's fully backed digital doors. 220 00:11:42.645 --> 00:11:46.105 Any time, any anywhere you can convert your 221 00:11:46.855 --> 00:11:49.825 uscs in doors one to one, 222 00:11:50.045 --> 00:11:52.425 one USDC is one US dollars. 223 00:11:52.885 --> 00:11:55.565 We have $60 billion in cash 224 00:11:55.565 --> 00:11:59.965 because there are $60 billion of USDC in circulation. 225 00:12:00.495 --> 00:12:02.205 Completely safe process. 226 00:12:04.735 --> 00:12:07.495 I mentioned the skyrocketing valuation of circle. 227 00:12:08.115 --> 00:12:11.255 It can also be observed in the historical funding 228 00:12:11.435 --> 00:12:14.935 of the company source business as usual, Crunchbase 229 00:12:16.015 --> 00:12:17.095 straight equity, a total 230 00:12:17.315 --> 00:12:21.855 of $1.1 billion throughout series A, B, C, et cetera. 231 00:12:22.735 --> 00:12:27.575 A very notable one is 2015 series C, $15 million 232 00:12:28.115 --> 00:12:32.775 coming from Goldman Sachs and IDG the primo valuation. 233 00:12:32.795 --> 00:12:36.735 So before you're cashing the 50 million is $200 million. 234 00:12:37.075 --> 00:12:38.615 So you understand that Goldman Sachs 235 00:12:38.615 --> 00:12:43.215 and I dgs, they are going to hold 20% of the shares, 50 out 236 00:12:43.215 --> 00:12:44.655 of 250. 237 00:12:44.955 --> 00:12:47.735 At that time, the Bitcoin is worth 238 00:12:48.155 --> 00:12:51.895 $225, which can be compared 239 00:12:51.895 --> 00:12:56.495 with a $100,000 plus today, three years later, 240 00:12:56.615 --> 00:13:01.495 a series E 110 million PRI Monet 2.9 billion 241 00:13:01.945 --> 00:13:05.455 Excel venture is going to be the leader three years later, 242 00:13:05.605 --> 00:13:09.415 private equity deal 440 million, 243 00:13:10.225 --> 00:13:12.775 quite the same as the 460 which are raised 244 00:13:12.775 --> 00:13:17.495 through the IPO Premo valuation 4.1 billion with fidelity 245 00:13:18.115 --> 00:13:22.975 20 22, 7 0.3 billion premo 400 million 246 00:13:22.975 --> 00:13:27.335 raised again with again fidelity and BlackRock. 247 00:13:29.705 --> 00:13:30.795 When you list a company 248 00:13:30.855 --> 00:13:34.275 or stock market, you may be make a mistake in the valuation 249 00:13:34.275 --> 00:13:37.795 of the company, but there is another big mistake which is 250 00:13:37.795 --> 00:13:40.515 not selecting the right time for the IPO. 251 00:13:41.015 --> 00:13:45.395 Now today, is it the right time for the IPO of circle? 252 00:13:47.585 --> 00:13:49.245 If you want to build your own answer 253 00:13:49.305 --> 00:13:52.245 to this very difficult question, you can look at the market, 254 00:13:52.315 --> 00:13:54.845 observe the market, and observe the evolution 255 00:13:54.845 --> 00:13:56.845 of your peers in your industry 256 00:13:57.105 --> 00:13:58.525 and their evolution on the market. 257 00:13:59.445 --> 00:14:02.125 Coinbase is kind of a peer, not exactly. 258 00:14:02.645 --> 00:14:03.845 I will tell you a little bit later, 259 00:14:04.425 --> 00:14:05.525 if you look at the evolution 260 00:14:05.525 --> 00:14:07.365 of Coinbase over the last five years, 261 00:14:07.775 --> 00:14:09.405 there are a few surprises. 262 00:14:10.185 --> 00:14:14.245 In 2022, the accident of the cryptocurrency 263 00:14:14.925 --> 00:14:18.645 USD is going to have an impact on all the cryptocurrencies 264 00:14:19.025 --> 00:14:22.325 and there is a very significant drop at that time. 265 00:14:22.325 --> 00:14:27.005 There also a drop of the Nasdaq but not the same size 266 00:14:27.785 --> 00:14:29.925 and so you understand that the fluctuations 267 00:14:29.925 --> 00:14:33.525 of Coinbase are amplifying the fluctuations of the nasdaq, 268 00:14:33.735 --> 00:14:36.325 which is quite consistent with the fact that the beta, 269 00:14:36.505 --> 00:14:38.365 the systematic risk coefficient 270 00:14:38.365 --> 00:14:41.525 of Coinbase is much larger than one. 271 00:14:42.195 --> 00:14:46.525 Then there is a very difficult period from mid 2022 to 272 00:14:47.065 --> 00:14:49.805 end of 2023, beginning of 2024, 273 00:14:50.185 --> 00:14:51.885 and then there's a kind of recovery. 274 00:14:52.465 --> 00:14:55.605 The recovery of the Coinbase is going to be quite the same 275 00:14:55.625 --> 00:14:58.805 as a recovery of the NASDAQ amplified again 276 00:14:58.985 --> 00:15:00.085 and for the same reason. 277 00:15:00.705 --> 00:15:03.165 Now, if you look at the evolution is quite stable over the 278 00:15:03.165 --> 00:15:04.325 last two years 279 00:15:04.835 --> 00:15:08.525 with some very curious situations which happened the last 280 00:15:08.985 --> 00:15:12.405 six months for the NASDAQ and for Coinbase. 281 00:15:15.015 --> 00:15:17.575 Interestingly, if you deep dive in the last six months, 282 00:15:18.115 --> 00:15:21.335 you observe that for the nasdaq it was quite stable 283 00:15:21.435 --> 00:15:23.855 during a couple of months, three months, 284 00:15:24.395 --> 00:15:29.255 and then there was a drop for the Coinbase Global Inc. 285 00:15:29.525 --> 00:15:32.215 Cooperation. There was a kind of stability 286 00:15:32.525 --> 00:15:35.775 with much higher volatility over the same period 287 00:15:35.875 --> 00:15:39.335 and then a drop, a very significant drop beta, 288 00:15:39.365 --> 00:15:41.615 much greater than one and then a recovery 289 00:15:41.995 --> 00:15:45.295 and it seems to be quite stabilized May 290 00:15:45.435 --> 00:15:47.775 and beginning of June for Coinbase, 291 00:15:48.275 --> 00:15:50.095 so maybe it's the right moment, 292 00:15:50.675 --> 00:15:53.695 but Coinbase is a very different company. 293 00:15:55.615 --> 00:15:59.775 Coinbase is not running a stable coin like circle 294 00:16:00.295 --> 00:16:02.175 Coinbase in the trading 295 00:16:02.435 --> 00:16:05.815 and the management of wallets of Bitcoins. 296 00:16:06.515 --> 00:16:10.215 So you immediately understand that the prosperity of Bitcoin 297 00:16:10.715 --> 00:16:13.175 and the prosperity of Coinbase are 298 00:16:13.855 --> 00:16:15.815 absolutely pegged one with each other. 299 00:16:16.595 --> 00:16:19.735 If you look at the evolution of Bitcoin USD price, 300 00:16:20.115 --> 00:16:21.975 you understand that there is some volatility 301 00:16:22.195 --> 00:16:26.255 and then it goes down and then it goes up and stabilizes. 302 00:16:26.795 --> 00:16:29.775 It is quite the same track as Coinbase 303 00:16:31.555 --> 00:16:32.835 plotting on the same graph. 304 00:16:32.855 --> 00:16:34.195 The evolution of the Bitcoin 305 00:16:34.735 --> 00:16:37.275 and the evolution of the stock price of Coinbase. 306 00:16:37.855 --> 00:16:40.155 You understand that the correlation is quite strong 307 00:16:41.275 --> 00:16:42.275 stability and volatility. 308 00:16:42.945 --> 00:16:47.075 Then it goes down, then it goes up, then it stabilizes. 309 00:16:47.855 --> 00:16:49.755 As far as Coinbase is concerned, 310 00:16:49.985 --> 00:16:53.035 it's not exactly the same recovery as the Bitcoin, 311 00:16:53.495 --> 00:16:55.435 but the correlation is quite obvious 312 00:16:55.435 --> 00:16:56.875 between these two assets. 313 00:16:59.285 --> 00:17:02.355 Let's go back now to circle and to its valuation. 314 00:17:03.315 --> 00:17:05.515 I told you that making the financial analysis 315 00:17:05.515 --> 00:17:08.115 and the financial valuation of a company like Circle 316 00:17:08.785 --> 00:17:11.115 operating in an industry which is so chaotic 317 00:17:11.335 --> 00:17:14.155 and unpredictable is really a challenge, 318 00:17:14.575 --> 00:17:18.155 but it's financial valuation X anti expo. 319 00:17:18.335 --> 00:17:21.355 Now the IPO is realized and it's a success. 320 00:17:21.425 --> 00:17:23.515 Then we can calculate valuation metrics. 321 00:17:24.055 --> 00:17:26.835 We know the market cap, we know the enterprise value, 322 00:17:27.095 --> 00:17:30.635 and we can calculate multiples based on the financial 323 00:17:30.635 --> 00:17:32.235 statements of 2024. 324 00:17:33.055 --> 00:17:35.115 The market capitalization at the end of the first 325 00:17:35.135 --> 00:17:38.995 of listing is $22 billion revenues generated 326 00:17:39.095 --> 00:17:40.595 by the company in 2024. 327 00:17:41.215 --> 00:17:45.595 $1.7 billion to the market cap represents more than 328 00:17:46.135 --> 00:17:48.115 10 years of revenues. 329 00:17:48.625 --> 00:17:51.845 It's quite high, but compared with Snowflake 50 euro, 330 00:17:51.985 --> 00:17:56.845 100 euro, it's reasonable between crows shareholders, 331 00:17:56.915 --> 00:17:59.085 capital shareholders contribution 332 00:17:59.085 --> 00:18:03.165 to the financing 1.1 in straight equity, which is 333 00:18:03.165 --> 00:18:05.245 what I described, plus convertible, 334 00:18:05.245 --> 00:18:07.725 preferred renewable, et cetera, et cetera. 335 00:18:07.785 --> 00:18:08.805 2.9 billion. 336 00:18:09.505 --> 00:18:11.685 Now, this is what was injected by investors 337 00:18:11.825 --> 00:18:13.245 and the value is 22 billion. 338 00:18:13.715 --> 00:18:16.005 It's a price to book of 7.6. 339 00:18:16.435 --> 00:18:18.485 It's value creation for the investors. 340 00:18:19.225 --> 00:18:21.245 The price earnings, which is 341 00:18:21.785 --> 00:18:24.925 not extremely illustrative when the company is growing is 342 00:18:24.925 --> 00:18:26.925 140 euros of earnings. 343 00:18:27.345 --> 00:18:31.405 The price value on adjusted EBITDA is 77 adjusted. 344 00:18:31.625 --> 00:18:33.325 Ebitda you remember is the ebitda. 345 00:18:33.425 --> 00:18:35.805 You get rid of the non recurrent items 346 00:18:36.065 --> 00:18:38.165 and you add a stock base compensation, 347 00:18:38.165 --> 00:18:39.765 which is a non-cash item. 348 00:18:40.545 --> 00:18:44.325 Of course, the value of a company is not the EBITDA today is 349 00:18:44.485 --> 00:18:47.525 not the earnings today, it's the evolution of ebitda, 350 00:18:47.845 --> 00:18:49.725 cashflow and earnings in the future. 351 00:18:50.465 --> 00:18:52.965 Now, what do you understand out 352 00:18:52.965 --> 00:18:56.445 of these multiples in the mind of investors, there is a huge 353 00:18:56.975 --> 00:18:58.365 profitable growth. 354 00:19:00.885 --> 00:19:03.275 Let's have a look at growth and profitability 355 00:19:03.415 --> 00:19:05.995 and financial performance, financial characteristics. 356 00:19:06.095 --> 00:19:10.315 At circle, you remember revenue is $1.7 billion 357 00:19:10.415 --> 00:19:11.475 in 2024. 358 00:19:12.215 --> 00:19:14.675 It represents more than twice as much as uh, 359 00:19:14.795 --> 00:19:17.835 revenues generated by the company in 20 22, 2 years before. 360 00:19:18.535 --> 00:19:20.715 If you take the first quarter of 2025, 361 00:19:20.945 --> 00:19:25.475 it's plus 55% against the first quarter of 2024. 362 00:19:26.375 --> 00:19:28.315 The total balance sheet, total assets, 363 00:19:28.315 --> 00:19:29.795 total equity and liabilities. 364 00:19:30.495 --> 00:19:34.035 It was $45.8 billion at the end of 2024, 365 00:19:34.415 --> 00:19:36.635 and it is 62.3 billion at the end 366 00:19:36.635 --> 00:19:37.995 of the first quarter, 2025. 367 00:19:38.855 --> 00:19:43.075 But the key item in assets is fiduciary cash, 368 00:19:43.885 --> 00:19:47.875 $45 billion of cash at the end of 2024. 369 00:19:48.135 --> 00:19:52.115 Why? Because we have issued 45 billion tokens 370 00:19:52.375 --> 00:19:54.835 of $1 each, so we need the cash 371 00:19:55.735 --> 00:20:00.275 and now the fiduciary cash is $61.3 billion at the end 372 00:20:00.275 --> 00:20:04.195 of the first quarter, 2025 for exactly the same reason. 373 00:20:04.655 --> 00:20:06.835 So the balance sheet is the cash 374 00:20:07.215 --> 00:20:10.635 and the liability, which is representing the SDCs. 375 00:20:10.895 --> 00:20:15.315 So stable coins issued by the company, adjusted ebitda. 376 00:20:15.375 --> 00:20:20.235 Now it's about profitability, $285 million, 377 00:20:21.115 --> 00:20:23.835 17% of 2024 revenue, 378 00:20:25.055 --> 00:20:27.515 but the EBITDA is not the free cash flow. 379 00:20:27.855 --> 00:20:32.395 EBITDA minus delta working capital requirement minus CapEx 380 00:20:32.415 --> 00:20:33.595 is about the free cash flow. 381 00:20:34.445 --> 00:20:38.475 CapEx are quite low just capitalized. 382 00:20:39.395 --> 00:20:40.875 Software development expenses 383 00:20:41.015 --> 00:20:45.195 and CapEx are significantly overpaid by the interest income. 384 00:20:45.775 --> 00:20:48.245 The interest income is the income you generate out 385 00:20:48.265 --> 00:20:51.285 of investing your cash in risk-free securities. 386 00:20:52.155 --> 00:20:53.685 Well, it's a financial income, 387 00:20:53.825 --> 00:20:55.445 but this cash is so much 388 00:20:56.125 --> 00:20:57.925 embedded in your business operations. 389 00:20:58.195 --> 00:21:00.645 Then you can qualify this interest income 390 00:21:00.905 --> 00:21:02.085 as an operating income. 391 00:21:02.755 --> 00:21:05.605 What about the working capital requirement? It's negative. 392 00:21:06.105 --> 00:21:07.205 So if you are growing, 393 00:21:07.745 --> 00:21:10.445 you are not financing an increase in the working capital 394 00:21:10.475 --> 00:21:13.645 requirement, you generate a resource which is an 395 00:21:13.725 --> 00:21:16.525 increasingly negative working capital requirement, 396 00:21:16.525 --> 00:21:18.645 so you understand that the company is growing, 397 00:21:19.025 --> 00:21:20.845 the company is generating an ebitda, 398 00:21:20.985 --> 00:21:24.485 and the EBITDA is straight free cash flow, 399 00:21:24.935 --> 00:21:28.365 which is in your pocket and remunerating your investors. 400 00:21:29.055 --> 00:21:30.565 These are about the financial 401 00:21:30.565 --> 00:21:31.885 characteristics of the company. 402 00:21:32.435 --> 00:21:34.885 It's about profitable growth. 403 00:21:35.225 --> 00:21:37.365 Growth, transform into profit 404 00:21:37.705 --> 00:21:40.005 and profit, transform into cash. 405 00:21:42.695 --> 00:21:45.395 Now, in order to conclude this vidcast, I would like to say 406 00:21:45.545 --> 00:21:49.155 that there is a word which is absolutely fundamental central 407 00:21:49.695 --> 00:21:54.195 in all these developments, which is trust the investors, 408 00:21:54.405 --> 00:21:57.035 trust the ability of the company to generate growth 409 00:21:57.575 --> 00:22:00.555 and transforms this growth into profits and so on, so forth. 410 00:22:00.975 --> 00:22:03.595 But the stakeholders, they trust the liquidity 411 00:22:03.595 --> 00:22:07.155 of the company, the quality of execution, the robustness 412 00:22:07.255 --> 00:22:09.915 of the operations is about liquidity 413 00:22:10.735 --> 00:22:12.635 and then why do you trust the liquidity? 414 00:22:12.635 --> 00:22:15.435 Because the company is operating in an environment which is 415 00:22:15.435 --> 00:22:20.395 about regulation, strict regulation, the New York state 416 00:22:21.355 --> 00:22:24.275 selected by the founders of the company to run the business, 417 00:22:25.095 --> 00:22:27.235 and once you have selected this environment, 418 00:22:27.365 --> 00:22:29.155 there are some people who are in charge 419 00:22:29.215 --> 00:22:30.795 of auditing your figures 420 00:22:30.795 --> 00:22:32.755 and confirming that the figures, 421 00:22:32.985 --> 00:22:35.675 they provide a fair picture about how the company is doing. 422 00:22:36.405 --> 00:22:39.435 Trust is absolutely al in any 423 00:22:39.835 --> 00:22:41.435 economic activity of the world. 424 00:22:42.145 --> 00:22:46.195 It's even more true in a business such as cryptocurrency, 425 00:22:46.645 --> 00:22:50.115 which is today an extremely chaotic industry. 426 00:22:50.905 --> 00:22:52.575 Thank you very much. I.