Stablecoin issuer Tether has recently announced a significant reduction in its fundraising target, cutting it from $15-20 billion to $5 billion in response to investor skepticism over its $500 billion valuation.
Reasons Behind the Funding Adjustment
Paolo Ardoino, CEO of Tether, stated in an interview that the previous figure was a misunderstanding, representing the maximum amount the company was willing to sell, not the target. He emphasized that Tether is highly profitable and could continue operations smoothly without selling any equity.
- Funding target reduced to $5 billion
- Strong profitability and solid operational foundation
- Some insiders are reluctant to divest shares
Profitability and Valuation Debate
Ardoino also noted that Tether has attracted significant investment interest even at the $500 billion valuation, although the company has yet to decide how much equity to sell, partly due to internal resistance to dilution.
He compared Tether to artificial intelligence firms, saying, 'AI companies generate the same level of profits as us, except there's a negative sign in front.'
Tether reported profits of about $10 billion in 2024, but earnings are expected to decline by approximately 25% in 2025.