Brian Armstrong, Coinbase CEO
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The Coinbase cryptocurrency exchange reached an implicit valuation of $ 68 billion before its highly anticipated direct listing on Nasdaq.
The latest valuation is based on a volume-weighted average price for Coinbase shares, quoted in a revised S-1 document released on Wednesday. The company said that private shares were traded at $ 343.58 each in the first quarter of 2021, which ended on March 15, which increases the company’s valuation by 13 times.
According to PitchBook data, the company’s last valuation was $ 8 billion in October 2018.
The revised regulatory record also shows that the company has more than 196 million shares outstanding in the first quarter of 2021, resulting in the last appraised value. Although the private market value is less indicative of the value of a company’s shares, Nasdaq will use this information to set a reference price for the company before its direct listing.
“These secondary market share sales help give an estimate of where they can be valued in the public market, but we put less weight on them than, say, if the company had raised money from new investors at that level,” said Matthew Kennedy , Senior IPO market strategist at Renaissance Capital.
Coinbase’s first deposit in February showed that the company posted a profit of $ 322 million last year on net revenue that more than doubled to $ 1.1 billion.
A direct listing is an alternative to an IPO and involves investors and employees converting their holdings into shares listed on a stock exchange. Founders are increasingly disenchanted with the IPO process in recent years, leading to a boom in direct listings and special purpose acquisition vehicles.
Companies like Roblox, Spotify, Slack and Palantir went public through direct listings on the New York Stock Exchange. Coinbase will be Nasdaq’s first major direct listing.
The exuberance around cryptocurrencies has grown steadily over the past year. Bitcoin, in particular, has gained more acceptance among leading companies and investors. Earlier on Wednesday, CNBC learned exclusively that Morgan Stanley became the first major U.S. bank to offer its wealth management clients access to bitcoin funds. Meanwhile, big companies like Square and Tesla have been buying more bitcoin in recent months.
In its initial order, Coinbase listed potential price falls in bitcoin as one of its risk factors. The company has more than 43 million users trading digital assets in more than 100 countries, according to the document.
Bitcoin was trading for just over $ 56,000 a coin on Tuesday, according to currency metrics. The crypto asset was never traded above $ 20,000 before December.
According to the latest lawsuit, Coinbase plans to issue around 115 million Class A common shares. The company, ranked 10th on the 2018 CNBC Disruptor 50 list, will be traded under the symbol COIN.