Coinbase, the largest crypto exchange in the United States, has filed with the Securities and Exchange Commission (SEC) to become a stock exchange through a direct listing (and not an initial public offering). Here’s what you need to know.
Coinbase is a crypto exchange in San Francisco that opened its doors for the first time. The platform, founded by Brian Armstrong and Fred Ersham, now has more than 43 million users worldwide and has so far made more than $ 456 billion – according to the latest filing with the SEC.
On January 28, the stock exchange formally announced its plans to publish via a direct listing on Nasdaq, “under a proposed direct listing of its Class A ordinary shares.” This confirms rumors from a Reuters report that emerged in July last year, stating that the company is interested in listing on the stock market.
It was initially believed that Coinbase would raise capital through an initial public offering (IPO); a process that involves the creation of new shares and the use of underwriters – usually banks – to help promote and market them to prospective investors. Instead, Coinbase decided to pursue a direct listing, or direct public offering (DPO), which essentially means that intermediaries are cut out and only shares that already exist are sold. No new shares will be created.
There are three clear advantages of this route over an IPO:
Coinbase Global, Inc. announced today that it has confidentially submitted a draft registration form for Form S-1 to the Securities and Exchange Commission (the “SEC”). Form S-1 is expected to take effect after the SEC submits its assessment process, subject to market and other conditions. ”
On February 25, Coinbase’s Form S-1 will be officially published by the SEC. Citigroup, Goldman Sachs and JP Morgan Securities were one of the banks selected by Coinbase to help it through the listing process.
Coinbase Class A shares will debut on the Nasdaq Global Select market under the tick COIN.
At the moment no official listing date has been given. We will update this article as soon as it is announced.
Since COIN shares will be listed on the Nasdaq stock exchange, this means that anyone who has an account with a broker who trades in US stocks can buy COIN shares. Similarly, investors will also be able to buy COIN shares on any mobile trading application that contains Nasdaq Global Select Market shares.
It is not yet known how many COIN shares will be available or what the price of each share will be.