It’s been a big year for Coinbase. The San Francisco-based company announced its plans to go public on December 17, 2020, via a direct listing on the NAsdaq. The move makes Coinbase the first major U.
S. cryptocurrency exchange to go public.
Coinbase’s debut is highly anticipated given the recent surge in interest in cryptocurrency and blockchain technology. Since launching in 2012, Coinbase has become one of the most popular cryptocurrency exchanges with over 35 million verified users and $320 billion in assets under management.
The company is also one of the most valuable startUPS in Silicon Valley, with a valuation of $8 billion as of 2018. So, what can investors expect from Coinbase’s IPO?
Here’s a look at what we know so far about Coinbase’s plans to go public and what it could mean for the future of the cryptocurrency industry.
Coinbase filed confidentially for an IPO with the U.S. Securities and Exchange Commission (SEC) on December 6, 2020. The filing was made public on December 17, 2020, and revealed that Goldman Sachs, J.
P. Morgan, and Allen & Company LLC will serve as lead underwriters for the offering.
According to the filing, Coinbase plans to sell Class A common stock to “the public in an offering registered under the Securities Act of 1933.” The filing also notes that “there is no established public market for Coinbase’s Class A common stock” and that “the initial public offering price will be determined by negotiation between Coinbase and the underwriters.”
Coinbase has not yet disclosed how many shares it plans to sell or what price it expects to fetch for them. The company previously raised $300 million in a private funding round in 2018 that valued it at $8 billion.
At that time, Coinbase sold Class A common stock at a price of $36.50 per share.
If Coinbase sells shares at a similar price in its IPO, it could raise as much as $4 billion and have a valuation of over $20 billion. This would make it one of the largest IPOs by a U.-based tech company in recent years.
However, it’s worth noting that the cryptocurrency market has been highly volatile over the past year, which could impact demand for Coinbase’s shares and ultimately its IPO price. For example, Bitcoin surged to an all-time high above $19,000 in December 2017 only to crash below $3,000 by December 2018.
Bitcoin has since recovered and is currently trading above $11,000.
Investors will also be closely watching how successful Coinbase is in executing its plans to go public given the recent struggles of other highly anticipated tech IPOs like Uber (UBER) and WeWork (WE). Both companies saw their valuations plummet after going public amid concerns about their business models and profitability prospects.
It remains to be seen if Coinbase can avoid a similar fate when it goes public sometime next year but given the strong demand for cryptocurrency assets right now, there’s a good chance that its IPO will be well-received by investors.”
What Price Will Coinbase IPO? – It’s difficult to predict what price Coinbase will IPO given the current volatility in the cryptocurrency market; however, if they sell shares at a similar price point to their last private funding round ($36.50 per share), they could raise up to $4 billion with a valuation of over $20 billion.