After months of waiting and uncertainty, the Coinbase cryptocurrency exchange finally received the green light from the United States Securities and Exchange Commission (SEC) to list its shares on Nasdaq Composite. Since filing an IPO last December, the giant crypto has decided to make its commercial debut on the stock exchange through a direct listing on April 14.
Regulatory analysis?
A few days ago, Coinbase announced that it has hired Brett Redfearn, a former SEC director, to manage its capital markets business. The hiring of Redfearn comes at a time of greater attention from lawmakers. With the opening of the capital of the stock exchange, its previous controversies also had great prominence. Last week, the Commodity Futures Trading Commission fined Coinbase $ 6.5 million, as the exchange was accused by the CFTC of “imprudently handing over[ing] false, misleading or inaccurate reports on transactions in digital assets. ”
Is Coinbase’s assessment justified?
The company, through its direct listing, can be valued at more than $ 100 billion. Its astronomical appreciation is largely thanks to its explosive growth. Coinbase generated total revenue of $ 1.3 billion and an adjusted EBITDA of $ 527.4 million in 2020 – representing an annual growth of 240% and 2200%, respectively. Its retail user base has also grown from 13,000 to 43 million between 2012 and 2020. With the NASDAQ technology and component industry trading at incredibly high valuation multiples, Coinbase’s valuation is quite reasonable to say the least.
In an amended S-1 file with the SEC, Coinbase stated that it planned to sell 114.9 million shares through its direct public offering. Coinbase will trade under the COIN ticker, and its reference price will be available the night before the announcement. As for dividends, Coinbase stated that it would not pay its ordinary shareholders and intended to “retain all available funds and any future earnings” for the transaction.
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