Coinbase Announces Trading Date For Direct Listing
The Securities and Exchange Commission has approved Coinbase’s request to hold a direct listing, so it has set the first day of trading for Apr. 14. The cryptocurrency exchange wrote a blog post about the SEC’s approval and announced the trading date. Q4 2020 hedge fund letters, conferences and more Coinbase announces direct listing date […]
The Securities and Exchange Commission has approved Coinbase's request to hold a direct listing, so it has set the first day of trading for Apr. 14. The cryptocurrency exchange wrote a blog post about the SEC's approval and announced the trading date.
Coinbase announces direct listing date
In Coinbase's direct listing, its shares will be listed on the NASDAQ under the ticker "COIN," and it plans to sell almost 115 million Class A common shares. A direct listing differs from a traditional initial public offering in that companies allow existing shareholders to sell their shares to new investors instead of selling new shares.
CNBC notes that the SEC's approval is a big win for cryptocurrency enthusiasts, who have piled into bitcoin and other digital currencies. More recently, institutional investors have started to dive in, and traditional banks have started to accept cryptocurrency, which previously was seen as too volatile and speculative.
The bitcoin price has climbed approximately 800% over the last year, and Coinbase's valuation has skyrocketed due to the view that it serves as a proxy for the broader cryptocurrency economy. In its prospectus, the company listed potential declines in the bitcoin price as one of its risk factors. Coinbase states that it has over 43 million users in over 100 countries trading cryptocurrencies.
What is the cryptocurrency exchange worth?
An updated SEC filing stated last month that the cryptocurrency exchange's implied valuation on the private market had reached $68 billion. That's based on an average price of $343.58 per share. Although a company's valuation on the private market doesn't fully indicate what its shares are worth, the NASDAQ will use that valuation to set the reference price before Coinbase's direct listing.
IPOs also differ from direct listings in that shares do not start trading at a set price. They simply start to trade with that reference price, suggesting what they could be worth.
The cryptocurrency exchange also announced that it would release its estimated results for the first quarter and outlook for the full year on Apr. 6 at 1:30 p.m. Pacific. Coinbase will stream its earnings call live on the Investor Relations section of its website, and after the call, a replay and transcript will be available on the site.