U.S. largest crypto platform Coinbase gears up for public listing through DPO
11 Apr, 2021 06:06
source: Singularity Financial
Singularity Financial Hong Kong April 11, 2021 – Coinbase is the talk of Wall Street, as the largest crypto platform in the U.S. gears up for its public debut on a traditional exchange Wednesday (April 14), through a direct listing (DPO). As a result, Coinbase shares will trade on the Nasdaq Exchange under the ticker symbol COIN.
A company opting for a DPO typically isn’t looking to raise capital to fund its ongoing operations, so it doesn’t need to issue new shares. Going public using this process allows early investors and company insiders to cash in on some of their investment, as they can sell shares on the first day of trading without being handcuffed by the typical lockup period. It also prevents the dilution that occurs with a traditional IPO.
Coinbase’s DPO comes soon after Coinbase Q1 earnings last week. During the first quarter of 2021, Coinbase generated a whopping $1.8 billion in revenues, when the company said its monthly transacting users have grown 117% quarter-on-quarter, helping it secure a net income of $800 million since the start of 2021.
Coinbase boasts more than 56 million individual users, 7,000 institutions, and 115,000 partners in over 100 countries, giving the platform an unmatched ecosystem that caters to every level of cryptocurrency enthusiast.
The financial performance of Coinbase as a company could depend more on interest in the crypto space rather than the performance of the crypto assets themselves. While the two may go hand in hand, it’s possible its performance could depend on volume of the crypto markets. For investors wondering how the stock might trade, it’s likely to be more of a play on activity or interest in the space. It also might be at least one step removed from the volatile prices of Bitcoin and other cryptos.
There is no doubt that the public offering of Coinbase is a big deal in the world of crypto as it will be the first cryptocurrency exchange to go public.
As Coinbase goes public, there’s been a resurgence in cryptocurrencies. Bitcoin recently jumped above $60,000. The average price of Coinbase shares traded on Nasdaq’s private market last month was $343.58.
The company will reportedly sell 114.9 million COIN shares to the public. Don’t be surprised if those shares are bought up quickly.
Analysts have estimated Coinbase’s value in the range of $70 billion to $90 billion. However, there are estimates that have gone as high as $100 billion.
For the fiscal year ended Dec. 31, 2020, Coinbase reported revenue of $1.14 billion, up 139% from 2019. This helped drive net income to $322 million, up from a loss of $30 million in 2019. Adjusted EBITDA was even more impressive, growing more than 2,000% to $527 million.