Red-hot stablecoin IPO Circle Internet Group fell sharply Tuesday, continuing a recent retreat as an analyst downgraded Circle stock to sell. Shares have round-tripped a recent aggressive entry.
Late Monday, Compass Point downgraded CRCL stock to sell from neutral, slashing its price target to 130 from 205. The analyst noted that the U.S. passed stablecoin legislation last week. But Compass Point expects Circle to share a greater percentage of interest income as it widens its distribution network.
Further, "We also expect traditional banks and Fintechs to announce competing stablecoin products," Compass Point said. "These 2H25 catalysts could force investors to recalibrate long-term EBITDA margin and market share expectations while putting pressure on CRCL's premium valuation."
Separately, Circle announced Tuesday the appointment of Adam Selipsky to its board. Selipsky is the former CEO of Amazon Web Services.
Circle Stock
Circle stock fell 8.2% to 198.31 Tuesday morning, though it found support at the 21-day line. In Monday's stock market trading, shares retreated 3.4% to 216.10, getting as low as 213.33. On Friday, CRCL stock reversed from an intraday high of 262.97 to close down 4.8%.
Circle stock has now decisively undercut the July 10 high of 215.60 that offered an early entry.
At Friday's intraday high, Circle was up 22% from the 215.60 entry. Investors should try to avoid letting a double-digit gain turn into a loss.
The Circle IPO priced at $31 a share, surging to 83.23 in the first day of trading on June 5. By June 28, CRCL hit a record 298.99.
It's possible that last Friday's high could serve as a new handle-like entry point.
Circle stock is on the IBD Leaderboard watchlist and part of the IBD 50 list of top growth stocks to buy and watch.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
