Bullish rides crypto-crazed market to upsized US$1.11bn IPO
Bullish, the Thomas Farley-led crypto exchange, secured US$1.11bn on its NYSE IPO, which was dramatically upsized and priced well above the valuation targeted amid huge investor demand.
JP Morgan, Jefferies and Citigroup priced 30m shares on Tuesday at US$37 each, above the high end of the upwardly revised US$32–$33 marketing range having already revised terms earlier in the week from 20.3m shares at US$28–$31.
The offering was more than 20 times covered, allowing for allocations to be concentrated to long-only investors. Management was active in the allocation process. One-third of investors who put in for the deal received no stock at all, bankers involved told IFR.
Cathie Wood’s Ark Investment Management and BlackRock committed at launch to invest up to US$200m between them.
After a lengthy pre-open cross, Bullish surged to US$90 on debut on Wednesday and traded as high as US$118, only to fade throughout the afternoon to close at US$68, the session low. Around 55.5m shares traded hands, equating to some US$5bn.
The offer price gave the four-year-old exchange a US$5.5bn enterprise valuation, a multiple of roughly 16.5 times' projected Ebitda for 2026. The much larger Coinbase trades at 21.3 times' 2026 Ebitda, according to LSEG data.
At the first-day close, that valuation had ballooned to US$10.3bn.
In an unusual move, Bullish took delivery of the proceeds in a mix of cash and stablecoin, providing efficiency and certainty of execution. This was the first time a company has taken delivery directly in the form of crypto on a regular IPO, though crypto financing is a common component on some SPAC transactions.
As of March 31, Bullish held US$144m of stablecoin, US$1.735bn of bitcoin, US$22m of ether and US$33m of other digital assets.
Bullish has grown rapidly through acquisitions, including the purchases of crypto data and analytics providers CoinDesk in 2023 and CCData in 2024. Going public will provide currency for additional acquisitions.
In the trailing 12 months ended March 31, Bullish generated US$51m of adjusted Ebitda on revenue of US$250m.
Bullish is led by Thomas Farley, the former CEO of NYSE Group and its parent Intercontinental Exchange.
The company is asking for a lot of credit for continued growth, and investors are willing to pay.
Bullish’s main exchange business last year processed US$284.8bn of bitcoin and US$144.5bn of ether, giving respective 35% and 44% market shares. In the first quarter, the exchange traded an average of US$2.5bn of bitcoin per day.
In addition to spot trading, the exchange recently introduced futures contracts.
The purchases of CoinDesk and CCData provide fee-related income from index administration and data services.
Investors who were fortunate enough to get stock in the deal have profited handsomely, along with Bullish's financial backers and the investment banks. However, those profits came at the expense of other investors, likely retail.
Figma fell into a similar “trap” as investors herded towards a 250% first-day pop following its US$1.2bn NYSE IPO late last month. It took two days for the action to cool off with that stock “seasoning” to close at US$76.31 on Thursday, still 131% above the US$33 IPO price but well below the US$115.50 first-day close.
Morgan Stanley, along with Goldman Sachs, Allen & Co and JP Morgan, ran Figma's IPO.
There seems to be no way of stopping the bull run. Investment banks can hardly be faulted for taking advantage by pushing out deals at the price the market is willing to pay.