The Crypto gold rush continues, Coinbase ($COIN) is set to go public on April 14th.
Unless you have been living under a rock, cryptocurrencies are the next big thing. Actually, they are quite present already and are making some serious noise. For individuals who are looking for a more conservative alternative than buying crypto, you may be in luck. As popularity grows, the well-known crypto platform is heading to the publically traded market. Coinbase, a crypto exchange platform that has grown to the largest cryptocurrency exchange in the U.S. in terms of trading volume, will be available to trade on the stock market starting April 14th. Coinbase will make stock market history, as they are the first company that specializes in cryptocurrency to head to the stock market. They will officially be listed on the Nasdaq under the ticker symbol $COIN.
Coinbase Inc. was founded in 2012 by Brian Armstrong and Fred Ehrsam. Not only is Coinbase a digital trading platform, but it is also a digital wallet for investors to store their cryptocurrencies. They also have upgraded features, that provide detailed advance charting and more complex trading options, according to Fox Business News. What started from a $150,000 cash infusion from a Y Combinator startup incubator program, will now best estimated to hit a $100 billion valuation once trading begins on April 14th. The Wall Street Journal states that Nasdaq has set the reference price for the highly anticipated public listing at $250 per share, which would bring that valuation around $60 billion fully diluted at the start. As of the end of 2020 Q4, Coinbase has generated over $3.4 billion in total revenue since its inception.
Per Coindesk, Coinbase has decided to come to market through a direct listing, rather than a traditional IPO. While an IPO creates new shares that are then underwritten and sold to the public, the direct listing has no new shares created. Only the existing shares are present, and the outstanding shares are sold with no underwriters involved.
There is no set reason yet why Coinbase chose the path of a direct listing, but it is a fairly new option for companies seeking to go public and is better suited for crypto companies. They may not have the resources to work and pay for underwriters, they may want to avoid any lockup agreements for the future, or they might not want to dilute current shares by making more. As the Coinbase news broke, cryptocurrency prices skyrocketed on the eve of their initial public offering.