UPDATE: March 18, 2021: Coinbase filed an amended S-1 filing, declaring its plans to sell 114.9 million shares in a direct-listing initial public offering as part of its NASDAQ offering. The IPO could drive the value of the U.S.'s largest cryptocurrency brokerage to over $100 billion.
Coinbase offered stock to private investors in the last quarter of 2020 and first quarter of 2021 at $200 and $375.01 per share, respectively. The volume-weighted price of the shares sits at $343.58. The company cautioned, "Our recent trading prices in private transactions may have little or no relation to the opening public price or the subsequent trading price of our shares," in their S-1 filing.
Since its inception, Coinbase has transacted $485 billion in trading volume, with 2.8 million monthly active customers. The San-Francisco-based company has $90 billion of digital assets on its platform with 43 million verified users.
Coinbase will be listed on NASDAQ under the ticker of 'COIN.' No trading date was indicated on the filing.
- Cryptocurrency exchange Coinbase filed an S-1 form with the Securities and Exchange Commission (SEC) Thursday, signaling its plan to go public.
- The move points to the growing mainstream acceptance of virtual currency as a store of value.
- The filing indicates the company plans to proceed through a direct listing rather than a traditional initial public offering (IPO). It will be traded on Nasdaq under the stock ticker "COIN."
"It feels like the market would receive it probably well just based on all the enthusiasm in cryptocurrency today," TMF analyst Jason Moser said.
The company is valued at around $77 billion based on recent trades of its shares on the Nasdaq private market. The company was trading last week at $303 a share.
Faster, cheaper offering
Under a direct listing, companies can raise capital publicly without having to secure the commitment of an underwriter. Spotify and Slack, which went public in 2018 and 2019, respectively, are two recent high-profile tech companies that bypassed the traditional IPO process.
Direct listings can lead to larger potential gains for investors, since the initial share price is set by market trades rather than through negotiations with the underwriter.
The offering gives people who've missed out on the cryptocurrency boom a chance to benefit from the industry's growth indirectly; to the extent Bitcoin and other cryptocurrencies do well, Coinbase should do well, too.
"It's like the person selling picks and shovels to the miners," Randy Carver of Carver Financial Services said. "You don't have to be a prospector to make money."
Bitcoin, the original cryptocurrency, whose value surged more than 300% last year, is hovering around $48,000 after hitting a high of $58,000 in mid-February.
Coinbase launched in 2012 and initially raised about $500 million from some of the biggest names in venture capital, including Y Combinator and Greylock Partners. Later investors include Andreessen Horowitz, Tiger Global and Union Square Ventures.
The company will be one of the few to be profitable when it goes public. Last year it swung from a loss to a profit of $322 million, on net revenue that more than doubled to $1.14 billion, Bloomberg reported.
To sustain its profitability, the company must grow its base of traders. The more people trade on its platform, the more money it makes; the lion's share of its revenue comes from transaction fees. Last year the number of users rose 34% to 43 million, while monthly transactions rose 180% to 2.8 million, according to the S-1 filing.
Bitcoin and Ethereum were the two most commonly traded currencies.
Going public is the next step of the company's goal to avail cryptocurrency to as many people as possible, Coinbase CEO Brian Armstrong said in the S-1 filing. "Coinbase is building the infrastructure to power the cryptoeconomy," he said, "helping bring the benefits of this new technology to the world."
The company hasn't announced an offering date, but analysts think it could be within the next month or two. If that happens, it would be the first major direct listing to take place on Nasdaq, the Bloomberg report says.
Goldman Sachs, JPMorgan Chase, Allen & Co., and Citigroup are the company's transaction advisors.