Coinbase Global reportedly traded between $350 and $375, reaching a valuation of $100 billion in a Nasdaq private auction last week. Although these markets are much less liquid and inexact than public markets, it gives an idea that there is going to be considerable demand. Now, the company is readying to go public on the Nasdaq under the ticker - COIN.
Coinbase's $100 billion valuation was a sharp increase from its 2018 valuation of $8 billion during its last funding round and from $50 billion in private market transactions in December 2020. Coinbase's CEO Brian Armstrong has a 15% stake in the company.
The company is also going for a direct listing rather than an initial public offering or a SPAC. It's also not looking to raise any proceeds from going public and keeping control of the company by a dual listing of shares. B shares will carry 20 votes per share, while A-shares have 1 vote per.
Some of the benefits of a direct listing are that it's cheaper, no dilution of shares, and it's faster. Many companies need the IPO process as the company is introduced to institutional investors by banks, however, Coinbase is pretty well-known enough that this isn't necessary.
Coinbase is the largest U.S based cryptocurrency exchange with 43 million users. It has a 24-hour trading volume of $3.2 billion, it accounts for a large portion of cryptocurrency trading worldwide. It's had staggering growth of 540% over the past year. And, there seems to be no stopping this growth with the strength in cryptocurrency prices and increasing public interest in blockchain-based digital assets like NBA Topshot.
The company was founded in 2012 by Brian Armstrong, a former Airbnb developer, and Fred Ehrsam, a former Goldman Sachs trader. The company went through the Y Combinator startup accelerator and launched its services to buy, sell, and store bitcoin. It received a $5 million Series A investment led by Fred Wilson and later attracted investment from venture capital firms Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital.
Stock Price Outlook
Coinbase's stock performance is likely to track the cryptocurrency ecosystem as its one of the major institutions. Its IPO also gives more conservative investors in the US exposure to that trend. And, it could feedback in a way to give institutional investors more confidence in making investments in cryptocurrencies or crypto-related companies.