Coinbase IPO is the hottest news in the Crypto City. Coinbase, with its headquarters in the Golden Gate City San Francisco, was the first cryptocurrency company to become a unicorn. Unicorn is a start-up with over a $1 billion valuation. The behemoth exchange company is preparing for a public listing in the stock market. According to Reuters, IPO may arrive by the end of 2020.
The above report claims Coinbase may be already in advance discussions with investment banks, regulatory board and law compliance firms about the public listing. Coinbase has not yet sent an official notice to the SEC about their intentions. But, as always, they may be working with a few officials.
What is a Direct Listing?
According to one of the sources, the unicorn company is opting for a listing directly in the market as a replacement of traditional IPO.
What does direct listing mean? Direct listing means that the company will not create, underwrite and sell any new shares in the company during the listing. Only outstanding shares that already exists come to the market for trading. This way, they avoid the huge underwriting fee that the investment banks charge.
Listing directly is now the most preferred way to avoid fee and reach masses in the last few years. Companies don’t want to raise new cash or a fund raise in the public IPOs anymore.
How Successful will Coinbase IPO be?
Coinbase is a high cash flow generating company, raising more than $500 million since its inception as a limited liability company. It provides a highly reliable on ramp off ramp for the Cryptocurrency ecosystem in many countries. Coinbase recent successful funding of $300M creates a valuation of 8 billion for the company.
Coinbase’s revenue stands at $1B in 2017, may be the highest peak for the company with the huge bull run. Precisely, no one knows the performance of Coinbase in 2018 and later years, TheBlockCrypto says it shrinked.
I’m eagerly waiting to see Coinbase’s S1 form SEC filing, regardless if they go for direct listing or not. It will exhibit an accurate overview about the behemoth’s financial results in the previous years. It will give us a clear picture on the cyclical Cryptocurrency market’s bull and bear cycles.
I was thinking that no company in their best mind would not want to list their stock when the public markets are at all-time highs. Especially, tech stocks are overheated with the Pandemic lockdown and PE rocking new highs. I still expect Robinhood newbies to pump more and the obliteration by whales will happen later.
High profile Investors that invested into unicorns at a early stage may want to take some profits when the markets are at its highest ever. That’s why you see sudden public listing interest by successful companies. The venture capitalists may not see much growth in the economy in the next one or two years.
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