Coinbase shares opened Wednesday morning on Nasdaq at $ 381, giving the cryptocurrency exchange an initial market cap of $ 99.6 billion with full dilution. The stocks quickly rose to $ 429 and hit a fully diluted market cap of $ 112 billion before falling almost back to their debut price.
Coinbase bypassed the traditional IPO process and listed its shares directly, allowing employees and existing shareholders to sell shares instantly at a market-based price. The Nasdaq posted a reference price of $ 250 on Tuesday evening, but no stocks changed hands at that level.
Excluding options and restricted stock units, Coinbase’s market capitalization at the opening price was approximately $ 80 billion. It is already one of the 85 most valuable US companies with options and RSUs.
Coinbase was founded in 2012 to make buying Bitcoin easier. It has emerged as the most popular crypto exchange in the US and has appreciated in value alongside the digital currencies Bitcoin and Ethereum. The service now has 56 million users, up from 43 million at the end of 2020 and 32 million the year before. In the last private financing round in 2018, investors valued Coinbase at $ 8 billion.
Coinbase hits the public market as a record amount of cash flows into cryptocurrencies and tech investors thirst for high-growth stories. Snowflake, Palantir, DoorDash, Airbnb, and Roblox all went public in the past six months and have a market cap of between $ 45 billion and $ 106 billion.
Compared to these companies and other companies in the IPO pipeline, Coinbase’s recent growth is unprecedented. The company announced last week, when it announced preliminary results for the first quarter, that revenue for the reporting period was up nine times year over year to $ 1.8 billion and net income was up from $ 32 million to 730-800 Million US dollars. The number of monthly transaction users (MTUs) rose from 2.8 million three months earlier to 6.1 million.
For full-year 2020 sales more than doubled to $ 1.28 billion, and the company rose from a loss in 2019 to a profit of $ 322.3 million.
Most of the transactions on Coinbase involve the purchase of Bitcoin or Ethereum, which were in a historic rift and have increased over 800% and 1,300% respectively over the past year. The company has announced that its short-term performance will be largely determined by crypto prices.
Bryan Armstrong, Co-Founder and CEO of Coinbase, owns 39.6 million shares. In August, Armstrong received a multi-billion dollar performance award tied to the company’s share price. This allowed him to buy up to 9.29 million options at $ 23.46 over a 10 year period.
CLOCK: Coinbase’s public debut is a historic moment for cryptocurrencies