Coinbase to debut on Nasdaq with a reference price of $250 per share
By Arghyadeep on Apr 14, 2021 | 04:34 AM IST
The cryptocurrency exchange Coinbase Global Inc is set to list the Class ‘A’ common stock on Nasdaq through a direct listing using the ticker “COIN,” on Wednesday, April 14, 2020. Nasdaq provided Coinbase with a reference price of $250 a share late Tuesday.
The reference price is not an offering price for the investors to buy stocks. Instead, it is a yardstick for performance when the stock starts trading as Coinbase has not previously traded on any listing market and has no previous day’s closing price. The opening price will be determined based on buy and sell orders in the opening auction on Nasdaq.
Coinbase chose a direct listing instead of a traditional IPO where no new shares are created for listing. Only existing and outstanding shares are sold without any underwriters’ involvement.
This means the company will not raise any money on Wednesday, and the existing investors can divest their holdings following the market debut, which is not in the case of initial public listing.
Coinbase disclosed on Tuesday that it would have about 261.3 million shares outstanding when it goes public via a direct listing on Wednesday. It had 130.7 million Class A shares and 68.5 million Class B shares outstanding on a fully diluted basis as of Monday.
In the listing filing with SEC on March 23, Coinbase said in the pre-listing trading of private sales between January 1 and March 15, 114.85 million shares were traded at an average price of $343.58 a share.
The San Fransisco-based cryptocurrency exchange is expected to be valued at about $100 billion on Wednesday.
Coinbase was founded in 2012 by Brian Armstrong, a former technical product engineer at Airbnb, and Fred Ehrsam, a former Goldman Sachs’ currency trader. Bloomberg estimated that Brian owns a stake worth about $15 billion, and Fred owns about $2 billion in Coinbase. It is the largest cryptocurrency exchange and lists about 50 cryptocurrencies, including Bitcoin and alt-coins like Etherium for trading.
Picture credit: FT