2021-03-22
Hardly any other event is as eagerly awaited, at least from an investor's point of view, as the Coinbase IPO. Although the listing is still waiting for an official date, trading activity on the Nasdaq Private Market is already testifying to brisk demand.
Ever since crypto exchange Coinbase made its IPO public last December, expectations have been high. As the industry leader in the U.S. market, with 43 million customers in over 100 countries, according to the SEC report, Coinbase holds a weighty position in the global crypto ecosystem. The IPO is a missing piece of the puzzle that will connect the crypto economy to traditional markets by proxy. For investors who may not or do not want to invest directly in crypto assets, Coinbase shares provide a vehicle to benefit from the upswing in the crypto market. Investors will have to be patient, however.
Drip by drip, details of the long-awaited IPO are gradually leaking out to the public. Coinbase has moved away from a "classic" IPO in favor of a Direct Listing. The Direct Public Offering (DPO) bypasses capital raising via broker dealers and is aimed directly at investors. Aside from the "COIN" ticker symbol, however, details are still scarce. An official listing date has not yet been confirmed.
On the Nasdaq Private Market, however, pre-market trading is already thriving. The market is not intended for the public and is only accessible to selected traders. However, the "test run" already gives hope for great things.
As a german Crypto Magazine reported, the company's valuation based on trading of its privately held shares on the Nasdaq Private Market has already risen to $77 billion. The unit price per share was most recently $303, with an estimated issuance volume of 254 million. No small house number; at US$77 billion, Coinbase's market capitalization exceeds that of the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, by US$14 billion.
Given the overall crypto market growth, a company valuation of $100 billion at public listing does not seem out of the question. Coinbase is benefiting significantly from an overall increase in demand for crypto assets, particularly from institutional investors. The OTC desks connected to Coinbase act as a popular hub for large-scale suppliers and buyers. In addition to MicroStrategy, Tesla is also said to be among Coinbase's clientele.
The rush has kept the company's coffers well-filled over the past year. Around 1.3 billion US dollars in gross revenues speak for themselves. Compared to the previous year, the crypto exchange not only more than doubled its revenue, but also turned a profit in the process. While the exchange was still in the red with 30 million US dollars in 2019, Coinbase has achieved a whopping plus of 322 million US dollars in 2020. That's according to a Feb. 25 filing with the SEC.
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