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Coinbase Direct Listing: What You Need To Know Ahead Of Crypto Exchange's Public Debut

April 14, 2021 7:38 am
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Coinbase Direct Listing: What You Need To Know Ahead Of Crypto Exchange's Public Debut

Coinbase (NASDAQ:COIN), the largest cryptocurrency exchange in the U.S., goes public today via a direct listing on the Nasdaq.

What Happened: The event marks an important milestone for the entire crypto industry, as it will be the first time a major cryptocurrency exchange goes public.

Apart from serving as a significant catalyst for mainstream adoption of crypto, Coinbase could leave a lasting impact if it lives up to estimates of an implied $140 billion valuation after its first day of trading.

According to a report, Nasdaq has set the reference price for Coinbase’s shares to begin trading at $250 per share, putting the company's valuation at $66.5 billion.

Why It Matters: This implies a significantly lower valuation than most market participants expected, but the end of the first day of trading will officially determine Coinbase’s market value based on market demand.

Coinbase is offering 114.6 million shares as part of its listing, which will trade under the ticker symbol COIN.

Although COIN is scheduled to be listed on the Nasdaq on April 14, it is unlikely that the stock will be immediately available for trading when markets open at 9:30 AM EST.

This is due to the nature of a direct listing, which allows existing employees and insiders to sell their shares first, as opposed to an IPO, where Coinbase would offer new stock.

Ahead of the listing, Coinbase awarded 100 shares to each of its 1,700 employees as a way of expressing its gratitude, Coindesk reported.

“The Coinbase IPO is potentially a watershed event for the crypto industry and will be something the Street will be laser-focused on to gauge investor appetite,” noted an analyst from Wedbush Securities.

What Else: However, not everyone on Wall Street was convinced that cryptocurrency exchange’s public debut was worth buying into.

A recent report from investment research firm New Constructs stated that a $100 billion valuation for Coinbase “remains ridiculous.”

"Our calculations suggest Coinbase’s valuation should be closer to $18.9 billion – an 81% decrease from the $100 billion expected valuation," wrote the analysts.

Image: Courtesy of Coinbase

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