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Summary
- The crypto industry is all set to witness a watershed moment as leading digital currency exchange Coinbase Global Inc gears up to become the first of its kind to go public on Wall Street.
- Instead of the traditional initial public offering (IPO), Coinbase has chosen to debut via a direct listing, or direct public offering (DPO) on Wednesday, April 14.
- Coinbase is set to begin trading on Nasdaq under the ticker of ‘COIN’.
The crypto industry is all set to witness a watershed moment as leading digital currency exchange Coinbase Global Inc gears up to become the first of its kind to go public on Wall Street.
Instead of the traditional initial public offering (IPO), Coinbase has chosen to debut via a direct listing, or direct public offering (DPO) on Wednesday, April 14. The crypto giant will begin trading on Nasdaq under the ticker of ‘COIN’.
©Kalkine Group 2021
Ahead of its public debut, digital coins such as Ethereum, Litecoin, Dogecoin, etc jumped notably, with Bitcoin shooting past an all-time high of US$ 63,000 on Tuesday.
So, how important is Coinbase DPO, and is it worth your time and money? Let’s find out.
Should You Invest In Coinbase DPO?
Since the company is not holding an IPO, there is no role of paid underwriters in Coinbase’s public debut. While this takes away the added expense of hiring such financial services, it also means that there are no underwriters to set an IPO price for its shares based on investors’ interest.
In case of direct listings, the shares are sold primarily at a market-driven price after the company in question has put up a price for reference.
Coinbase has reportedly set a reference price of US$ 250 per share for its direct listing and posts a fully diluted share count of some 261.3 million, as per its SEC filings. This gives the crypto trading giant a valuation of US$ 65.3 billion, which is significantly up from its valuation of about US$ 1.6 billion in 2017.
Founded in 2012, Coinbase is said to have raised about US$ 847.3 million via private financing over 14 rounds of funding over the years, as per data platform Crunchbase.
©Kalkine Group 2021
Ahead of its much-awaited public listing, Coinbase created a buzz by giving a glimpse of latest financials. According to its filings, Coinbase saw its revenue significantly expand from US$ 585.1 million in Q4 2020 to a total of US$ 1.8 billion of the first quarter of 2021.
All things considered, Coinbase DPO is garnering a lot of attention, especially among crypto enthusiasts, as it is likely to open the digital currency market to a wider audience. Also, as a public listing comes only after a green signal from securities regulatory bodies, Coinbase’s DPO adds a big milestone for the entire crypto market.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
