After a year of massive growth in the value of Bitcoin, Coinbase Global plans to launch its highly anticipated initial public offering. The Coinbase exchange is scheduled for April 14.
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Coinbase is the largest US cryptocurrency exchange and contains about 50 cryptocurrencies for trading. The company will be the first major crypto company to be announced.
Bitcoin is the largest digital currency by market value and has more than doubled so far this year. As a result, it helped increase the total value of the cryptocurrency market to more than $ 2 billion, which doubled in about two months amid rising institutional demand. Bitcoin accounts for about half of the $ 2 billion.
The Coinbase exchange is expected to boost the foreign exchange market.
Morgan Stanley now allows some of its richest clients to add Bitcoin to their portfolios. In addition, Tesla now accepts Bitcoin as payment for cars. Mastercard (MA) and PayPal (PYPL) also accepts Bitcoin.
Coinbase IPO is a direct list
The company does not conduct a traditional IPO. It is rather announced through a direct listing. The current owners of Coinbase shares will convert their shares to make them available for trading. This way, they can avoid large fees from investment bankers.
Direct offers are scarce, but are offered by large companies such as Spotify Technology (SPOT) en Palantir Technologies (PLTR).
The Coinbase exchange will trade on the Nasdaq under the ticker COIN.
The company sells 114.9 million shares directly to the public, according to the Coinbase IPO filing. The plan is to disclose a reference price for shares a day before trading begins.
Coinbase is valued somewhere in the region of $ 70 billion to $ 90 billion.
In a voluntary and preliminary earnings report for the first quarter released after the market closed, Coinbase said it had 56 million users on its platform, up from 6 million users in the previous year.
First term is the best of 2020
Its results in the first quarter passed in 2020. Coinbase reported revenue of $ 1.8 billion in the quarter, with net income of approximately $ 730 million to $ 800 million, according to the submission. Last year, it generated $ 1.3 billion in revenue with a profit of $ 322 million.
Trading volume rose more than $ 335 billion in the quarter. For the whole of 2020, the trading volume was $ 193 billion.
Total assets on Coinbase’s platform increased from $ 90 billion to $ 223 billion, an increase of almost 150%.
The company’s year-round outlook offers a range of possibilities, ‘given the inherent unpredictability of our business’, the company said in its report.
“To put the obvious, it’s difficult to predict our business,” Alesia Haas, chief financial officer of Coinbase, said after the earnings report. This is because it cannot predict the prices of Bitcoin and other cryptocurrencies.
About 96% of Coinbase’s revenue comes from transaction fees. In addition to its exchange services, it has several agendas. Among them is Coinbase Commerce, which offers online retailers software that allows them to accept cryptocurrency payments.
Follow Brian Deagon on Twitter @IBD_BDeagon for more information on technology stocks, analytics and financial markets.
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