Arca CIO Jeff Dorman slams 'measly' CRCL allocation from Circle's oversubscribed IPO

It appears not everyone is happy with Circle’s overperforming initial public offering. According to Jeff Dorman, chief investment officer for crypto asset manager Arca, the firm received a fraction of its intended investment in CRCL, the newly listed shares for the newly public firm Circle. 

Circle Internet Group listed on the New York Stock Exchange on Thursday, marking one of the best public debuts of the year. The firm and executives, including CEO Jeremy Allaire, sold 34 million IPO shares for $31 per share, raising over $1 billion . 

CRCL opened at a price of $69 per share and is currently trading at over $85, representing an increase of more than 175%. CRCL traded as high as $90 on Thursday. 

Dorman said Arca placed an order to invest $10 million in CRCL IPO shares months ago on “Day 1” of Circle’s roadshow. However, the firm received “a measly” $135,000 allocation, or just 1.35% of its order, according to a post on X.

“You decide to give fat allocations to TradFi mutual funds and hedge funds who likely didn’t even read your prospectus, have no wallets, and will never use your product,” Dorman wrote in a public letter — titled “F*ck you!” — posted to X. 

Circle’s round was oversubscribed and upsized at least twice. The firm initially intended to sell shares for around $25 and later said it would seek to sell 32 million shares for between $27 and $28 . 

Typically, when funding rounds or public listings are oversubscribed, investors will not always receive their promised allocations. The Block has reached out to Circle and Arca for comment. 

“I cannot believe our efforts to help you grow for years culminated in you giving us a joke, throwaway allocation. You are the first and only crypto company who has EVER treated Arca this way,” Dorman added. 

According to Dorman, Arca has been a longstanding customer and occasional partner of Circle, and even allegedly assisted the firm “through tough times like the March 2023 banking crisis” when USDC depegged from the U.S. dollar. 

Circle is the second pure-play crypto firm to go public in the U.S., following in the footsteps of the firm’s close partner, Coinbase, which pursued a direct listing in 2021. Circle had attempted to go public through a SPAC merger, which was called off during the 2022 market downturn. 

"You and Coinbase deserve each other," wrote Dorfman, "a match made in heaven of two incompetent management teams who were early, but screw up everything you touch."

Dorman said Arca would close its current Circle accounts and begin using rival stablecoins, such as USDT.

"If you want to see how irrelevant and generic your product has become, this is a decision that was easy to make and doesn’t affect our business one bit because there are perfect substitutes everywhere," he said. 

USDC is the second-largest stablecoin by market capitalization.