Tether prohibits shareholders from selling shares at low prices and is considering tokenizing its stock, with a target valuation of $500 billion.

Bloomberg reports that Tether is considering raising up to $20 billion through stock sales and tokenization of shares. The company previously intervened to prevent some existing shareholders from selling shares at low prices and is exploring ways to ensure investor liquidity while maintaining a valuation of $500 billion.

Tether seeks $20 billion in funding, SoftBank and Ark may invest

It was reported at the end of September that Tether, the world’s largest stablecoin issuer, was in talks with investors to raise up to $20 billion, with SoftBank Group (SoftBank) and Ark Investment Management (Ark Investment Management) potentially among the major investors in this round of financing. Support from these two investment giants could help Tether accelerate growth and gain more mainstream recognition in technology and finance sectors.

The advisory for this financing deal is the New York-based investment bank Cantor Fitzgerald, which was previously led by U.S. Secretary of Commerce Howard Lutnick. The firm also manages custody of Tether’s assets and has a long-term, solid partnership with Tether.

SoftBank Group, headquartered in Tokyo and led by founder Masayoshi Son, is known for bold investments in technology. The company also bets on growth in data centers, autonomous vehicles, and semiconductors, and has deep collaborations with OpenAI.

Ark, led by Cathie Wood, has invested in Tether’s competitor Circle through an IPO.

Tether prevents existing shareholders from selling shares at low prices, aiming for a $500 billion valuation

Sources familiar with the matter say that at least one existing shareholder previously planned to sell shares at a price far below the company’s $500 billion valuation. Tether has taken action to prevent this.

Tether has not disclosed the identities of investors who attempted to sell shares but explicitly stated:

“Any investor attempting to bypass the established process led by top global investment banks or engaging in transactions with parties not authorized by Tether management is unwise and reckless.”

Sources reveal that Tether management is concerned that existing investors’ selling behavior could impact its massive fundraising. Another source indicated that the company currently has no plans for existing shareholders to sell shares in this primary financing round.

Tether executives are considering various options, including share repurchase and, after the deal closes, tokenizing the company’s shares to be stored digitally on the blockchain.

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