Coinbase CEO Brian Armstrong at Vanity Fair’s New Establishment Summit, October 2019.Vanity Fair
Popular cryptocurrency exchange Coinbase intends to become a publicly-traded company, and pursue a direct listing of its Class A common stock, the exchange said in a blog post on 28 January.
According to the announcement, the firm has decided to use the direct listing format for a number of reasons, one of which is that it does not require an underwriter to facilitate the sale. In addition, direct listings are said to protect against share dilution, as it does not require new shares to be issued like in an IPO, but instead sells existing shares directly to the public. The format also allows individuals to sell their stock in the company without having to wait for a lock-up period.
Coinbase first revealed its plans to go public back in December 2020, when it confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (SEC). Currently the S-1 is not publicly available, but the firm said it will become effective after the SEC completes its review. Coinbase said in its blog post:
“This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities. This announcement is being issued in accordance with Rule 135 under the Securities Act.”
According to Coinbase’s website, the firm already has over $90 billion in assets on its platform — and more than 43 million registered users — which according to research company Messari could place the valuation of the company at $28 billion. In order to grow, the exchange has acquired some high-profile companies in the past couple of months, including trade execution infrastructure provider Routefire, and blockchain infrastructure provider Bison Trails.