By Mark DeCambre
Coinbase is the talk of Wall Street on Wednesday, as the largest crypto platform in the U.S. gears up for its public debut on a traditional exchange, arriving via a direct listing rather than a more traditional initial public offering.
The arrival on the public markets of Coinbase /zigman2/quotes/225893452/composite COIN -2.54% is a big moment in the world of cryptocurrencies. The company was created just over a decade ago with the genesis of bitcoin /zigman2/quotes/31322028/realtime BTCUSD -3.73% and today stands at what many in the industry have described as a tipping point .
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There are few ways to secure direct ownership of crypto currencies, outside of buying them directly, a service that Coinbase provides for a fee, and which investors appear willing to pay for.
Coinbase, whose users primarily deal in bitcoin and ethereum, reported last week that its revenue soared 847% in the first quarter to $1.8 billion, and that it now has 56 million verified users.
Leeor Shimron, an analyst at FundStrat Global Advisors, described the Coinbase listing as seminal. “Coinbase’s direct listing is a watershed moment for the crypto industry.”
Wedbush analyst Dan Ives said the listing is a reflection of cryptocurrencies’ having arrived at the mainstream. “Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of bitcoin and crypto for the coming years in our opinion,” he wrote in a research note Tuesday.
Some caution that the implied valuation for Coinbase as a crypto exchange has gotten too lofty , compared with traditional stock exchanges like Nasdaq Inc. /zigman2/quotes/205547889/composite NDAQ +2.15% , where Coinbase will directly list, and Intercontinental Exchange /zigman2/quotes/209108507/composite ICE +0.97% , the parent company of the New York Stock Exchange.
In a direct listing, a company floats its shares on a stock exchange but without hiring banks to underwrite the transaction as in an IPO.
The following is what you need to know about the Coinbase lising.
What is Coinbase?
The Silicon Valley crypto exchange was co-founded in 2012 by Brian Armstrong, 38, who runs the platform as chief executive. Fred Ehrsam, a Coinbase director, also played a role in the company’s creation.
According to Forbes , Armstrong’s net worth is currently $6.5 billion, based on his ownership in the company, and his wealth is likely to increase if the direct listing goes off successfully.
When will Coinbase go public?
The Coinbase listing is set to hit the Nasdaq on Wednesday. The precise timing of the list isn’t clear, but Palantir Technologies Inc.’s /zigman2/quotes/221054928/composite PLTR +9.31% direct listing in September saw the first trade of its debut session after 1:30 p.m. Eastern time.
Where will it list?
Coinbase is set to go public on the Nasdaq under the ticker symbol “COIN” as a direct listing, meaning it isn’t raising new money, as a company would in a traditional IPO.
Coinbase is the Nasdaq’s first major direct listing, with Spotify /zigman2/quotes/207488629/composite SPOT +3.00% , Slack Technologies /zigman2/quotes/212180539/composite WORK +1.30% and most recently Palantir all opting to directly list at the NYSE.