Stablecoin issuer Tether has stopped secondary share sales while pushing ahead with talks to raise as much as $20 billion in a stock deal tied to a $500 billion valuation, according to Bloomberg.
The decision was reportedly made in order to block attempts by existing shareholders to sell stakes outside the company’s process, a step executives viewed as a risk to the fundraising.
The company is now looking at ways to handle investor liquidity after the deal closes. Options under discussion include share buybacks and turning company stock into tokenized shares that can live on a blockchain, people familiar with the matter said.
The talks gained urgency after management learned that at least one shareholder was trying to sell at a sharp discount.
Tether stops discounted exits to protect fundraising
“We have received clear confirmation that these efforts will not proceed,” Tether allegedly said in response to questions.
In a separate statement, the company added, “It would be imprudent, and indeed reckless, for any investor to attempt to circumvent the established process led by Tier 1 Global Investment Banks or to engage with parties not authorized by Tether’s management.”
According to Bloomberg, Tether’s management was afraid that early exits will weaken confidence in its $500 billion raise, and executives are not planning to allow existing shareholders to sell as part of the main round.
One shareholder, whose identity Bloomberg News could not determine, sought to sell at least $1 billion of stock, people familiar with the matter said. Materials reviewed by Bloomberg put Tether at $280 billion in that proposal. It was not clear whether that figure included any new capital raised by the company.
Another investor, Blockchain Capital, weighed selling shares before the fundraising plans became public but later chose not to proceed, a person with knowledge of the matter said. Leadership at Tether did not try to stop Blockchain Capital from selling, the person added.
The company has said it wants strategic investors in the deal and has held talks with SoftBank Group Corp. and Ark Investment Management LLC. No timeline has been set for an initial public offering, meaning investors may have to wait years for a public-market exit.
With no IPO clock running, Tether is exploring other ways to offer liquidity after the raise, like tokenization.
The idea is already being tested elsewhere, like Mike Novogratz’s Galaxy Digital, introduced a tokenized version of its Nasdaq-listed shares in September that trade on the Solana blockchain. Similar efforts have come from Kraken and Robinhood Markets Inc.
Tether has its own footprint in this area. In November 2024, the company launched a tokenization business called Hadron. The platform lets users convert assets into blockchain-based representations, including stocks, bonds, and commodities.
The market is still small. The total value of real-world assets traded as tokens has roughly tripled this year but stands at $18 billion, a level comparable to the least valuable company in the Nasdaq 100 Index.
Buybacks offer another option. In crypto and beyond, companies have used repurchases to give early backers and staff a path to cash out before an IPO. Ripple, which raised $500 million in November from investors including Citadel Securities LLC and Fortress Investment Group, said it has bought back more than 25% of its outstanding shares in recent years.
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Source: https://www.cryptopolitan.com/tether-halts-secondary-sales/
