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Coinbase hits $ 100 billion and then slips onto Landmark’s crypto list

(Bloomberg) – Coinbase Global Inc. cryptocurrency exchange rose above a valuation of $ 112 billion on its trading debut Wednesday, then fell back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board. The massive valuation that dwarfs more traditional financial firms like Intercontinental Exchange Group Inc. and Nasdaq Inc. itself are a landmark for the crypto industry and for Coinbase, which was founded nearly a decade ago when few people had heard of Bitcoin and many Exchanges were operated by amateurs from their garages and homes. Coinbase shares were trading at $ 332.99 apiece at 2:56 p.m. on the Nasdaq, after previously rising to $ 429.54. Bitcoin, which together with Ethereum made up 56% of Coinbase’s trading revenue in 2020, fell below $ 62,000 after previously hitting a record price. Not only is the early rally a sign of the success of Coinbase, which was worth $ 8 billion or less, it’s also a win for Nasdaq, which held its first direct listing after beating the New York Stock Exchange for Coinbase’s debut would have. Coinbase is the largest company that takes the direct listing route to the market. Alesia Haas, Coinbase’s chief financial officer, said in an interview Wednesday morning that one of the reasons the company chose Nasdaq was because the exchange offered the ticker symbol “COIN,” which it didn’t is not part of the New York Stock Exchange pitch. “They ended up having the COIN ticker, and that was a really great ticker for us,” said Haas. Nasdaq on Tuesday set a reference price of $ 250 per share for Coinbase’s Direct listing, a number required for the stock to begin trading but not a direct indicator of the company’s potential market cap. So far, every major direct listing has opened well above its reference price. Roblox shares debuted at $ 64 each – 42% higher than the number set by the exchange. At the beginning of March, Coinbase’s shares changed hands at a valuation of around USD 90 billion, Bloomberg News At the time, Barry Silbert, founder of the Digital Currency Group, who has built an empire that spans the crypto world, reported on one of the last opportunities for investors to trade their private shares before the company went public at reference price does not change hands, in an early indication that the stock was set to hit a pop on opening. Direct listings are an alternative to a traditional IPO that has only been used a few times. As of Wednesday, every company – including Slack Technologies Inc., Palantir Technologies Inc., and most recently Roblox Corp. – listed on the New York Stock Exchange. In addition to the ticker, Nasdaq’s ability to provide a private market for Nasdaq was one of Coinbase’s selling points, according to a person familiar with the matter, as well as the services it offered, such as investor relations. Suitable for a company that made a “remote first” commitment in May. Coinbase’s pitch meetings with Nasdaq were hands-on, the person added, “We rated both NYSE and Nasdaq and ultimately felt the Nasdaq platform was in line with our value as a technology company.” Haas said: With a direct listing, a company’s shares begin trading without any new shares being issued to raise capital. This avoids any dilution of the shares and, unlike a conventional IPO, often enables the company’s existing investors to bring their shares to the market without waiting for the blocking period, which is usually six months. Coinbase’s lure was a win for Nasdaq, whose year-long battle for a larger share of mega-listings has grown in importance over the past year. Half of the 10 largest US IPOs without blank check companies took place on the Nasdaq, according to Bloomberg. That included Airbnb Inc.’s third largest IPO for $ 3.8 billion in December. This was the largest listing on the Nasdaq since Facebook Inc.’s $ 16 billion monolith in 2012. Trust in the exchange is Brian, Chief Executive Officer of Coinbase Armstrong, who founded the company with Fred Ehrsam in 2012. Unlike most of its competitors, the founders of Coinbase always viewed strict legal compliance as the cornerstone of the business, which has helped the exchange grow in the United States, which is home to many early Bitcoin traders and investors left the company in 2017 and is now investing in crypto startups. Both Armstrong and Ehrsam own huge chunks of Coinbase. Coinbase last week expected first-quarter earnings of $ 730 million to $ 800 million, more than double what it made in all of 2020 financial services company, “said Barry Schuler , Co-founder of Coinbase investor DFJ Growth, who was on the company’s board of directors until last year. “Like a crypto version of a Goldman Sachs or a Morgan Stanley.” Skeptics, regulation The company’s rapid growth was not without controversy. It ranged from frequent failures during times of heavy trade to the new restrictions Armstrong placed on employee policy discussions last fall. In March, Coinbase also signed a $ 6.5 million deal with the Commodity Futures Trading Commission after the agency announced that the company reported inaccurate data on transactions and that a former employee made improper deals on Die Welt, which increases oversight and challenges Bitcoin’s usefulness as a currency. Isabel Schnabel, board member of the European Central Bank, described Bitcoin in an interview with Der Spiegel earlier this month as a “speculative asset with no discernible fundamental value.” Trading with Coinbase was unimaginable a few years ago when Wall Street was full of crypto bears, including Jamie Dimon von JPMorgan Chase & Co., who once called Bitcoin a “fraud”. Dimon later regretted saying this. His bank and Goldman Sachs Group Inc. advised on the direct listing of Coinbase: “I don’t think we got Wall Street approval, but we tried to create more transparency for crypto and introduce crypto to more and more users”, as Hass from Coinbase said. Crypto Partners “Wall Street can become a crypto dealer. They will be partners with us in the future, ”she said. Coinbase’s early investors are celebrating. “I think Coinbase is Microsoft, Netscape, Google or Facebook this decade,” said Garry Tan, founder and managing partner of Initialized Capital -stage Coinbase investor, said in an interview with Bloomberg Television Tuesday . For more articles like this, please visit us at bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP