In brief
- Coinbase has registered around 114.9 million shares for its direct listing.
- The exchange turned in a profit of $322 million in 2020.
Coinbase, the top US crypto exchange, said on Wednesday that it has registered 114.9 million shares for its direct listing on the Nasdaq, which it's opted for instead of a traditional IPO.
In a direct listing, companies float their existing shares directly to the market, instead of Wall Street banks tapping underwriters to set the opening price. (In December, the SEC changed its rule so that direct-listing companies can also issue new shares if they choose). It also allows Coinbase to avoid some of the more onerous requirements of an IPO, including using the pre-IPO road show. Slack, Spotify, and Palantir all went the direct listing route.
Coinbase announced its plans to go public in January 2021, and it filed its Form S-1 with the SEC in February, providing would-be investors with a detailed overview of a company going public, including its financial information and risk factors.
Coinbase Direct Listing (Formerly IPO): Everything You Need To Know
In January 2021, San Francisco-based cryptocurrency exchange Coinbase announced plans to go public via a direct listing. The company shared the news in a blog post, in which it announced its intent "to become a publicly-traded company pursuant to a proposed direct listing of its Class A common stock." Here it comes! @coinbase is doing a direct listing. (disclosure: Coinbase is an investor in @Vertalo_ )https://t.co/edQO3pSeLL — Dave Hendricks (@davehendricks) January 28, 2021 The following...
The S-1 filing revealed that the San Francisco-based exchange brought in a $322 million profit in 2020 on revenues of over $1.2 billion, making it a rare profitable unicorn in a recent parade of IPOs from hot tech companies that still lose money. Its profits have risen significantly since 2019, when it had a loss of $30 million on $533 million of revenue.
Coinbase's listing will be a milestone for the crypto industry, and will provided investors with a new way to get exposure to crypto without buying it directly.
Coinbase Is the Next Facebook. Really.
As Coinbase prepares to go public in the coming weeks, early reports suggest the company will be worth around $104 billion. That figure has led Bloomberg and Axios, among others, to note that the cryptocurrency giant's public listing will be the most valuable of any U.S. tech company since Facebook. At first blush, the comparison between the two companies is far-fetched. Facebook is a household name around the world and has over two billion monthly active users, while Coinbase still occupies...
The crypto exchange, which launched in 2012, has two main lines of business: its retail brokerage service, and Coinbase Pro, a more advanced exchange, where users can buy and sell cryptocurrencies directly from other users, and make more complex trades.
The business has grown significantly in recent years. According to its SEC filing, Coinbase now has 43 million "verified" users, and 2.8 million monthly active users. It makes the bulk of its revenue through its fees on its brokerage app.
But not everyone thinks that Coinbase's $100 billion valuation—based on private trading of shares ahead of its direct listing—is realistic, particularly in light of the growing number of competitors in the crypto field. New Constructs CEO David Trainer told Decrypt that Coinbase's huge valuation is based more on broader crypto bullishness than the company's fundamentals.
$100 Billion Coinbase Valuation Is Too High: Analyst
Coinbase’s current rumored valuation of approximately $100 billion is “too high." That's the verdict of Wall Street veteran David Trainer, CEO of stock research firm New Constructs. Ahead of its upcoming direct listing, private trading of Coinbase shares has indicated an implied market value for the cryptocurrency exchange as high as $100 billion. Trainer told Decrypt that with increasing competition in the cryptocurrency market, neither Coinbase’s current market share, nor its margins, look su...
Rival crypto exchange Kraken is also exploring going public via a direct listing. The company won a bank charter in the state of Wyoming last year, and is aiming for a valuation of around $20 billion, a source with knowledge of the matter told Decrypt.
But currently, all eyes are on Coinbase. There will be potential hurdles, but backing what could be the next Facebook may be hard for investors to resist.
