Brian Armstrong, Coinbase CEO
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Cryptocurrency exchange Coinbase has reached an implied valuation of $ 68 billion ahead of its highly anticipated direct listing on the Nasdaq.
The latest valuation is based on a volume-weighted average stock price that Coinbase cited in a revised S-1 filing released Wednesday. The company reported that private shares traded at $ 343.58 each for the first quarter of 2021 ending March 15, pushing the company’s valuation 13 times higher.
According to data from PitchBook, the company was last valued at $ 8 billion in October 2018.
The revised legal filing also shows that the company has more than 196 million shares outstanding for the first quarter of 2021, resulting in the latest appraisal figure. While the retail market value is less indicative of the value of a company’s stock, the Nasdaq will use that information to establish a reference price for the company prior to direct listing.
“Those sales on secondary market shares help give a margin of where they can be valued in the public market, but we attach less importance to them than, say, if the company had raised money from new investors at that level,” said Matthew Kennedy, Senior IPO Market Strategist at Renaissance Capital.
Coinbase’s initial filing in February revealed that the company reported profits of $ 322 million last year on net sales that more than doubled to $ 1.1 billion.
A direct listing is an alternative to an IPO, and it involves investors and employees converting their ownership interests into shares listed on a stock exchange. Founders have become increasingly disillusioned with the IPO process in recent years, leading to a boom in direct listings and special purpose vehicles.
Companies such as Roblox, Spotify, Slack and Palantir went public via direct listings on the New York Stock Exchange. Coinbase will be Nasdaq’s first major direct listing.
The exuberance surrounding cryptocurrencies has grown steadily over the past year. Bitcoin, in particular, has gained more acceptance among mainstream businesses and investors. Earlier Wednesday, CNBC heard exclusively that Morgan Stanley has become the first major US bank to provide its wealth management clients with access to bitcoin funds. Meanwhile, large companies, including Square and Tesla, have bought more bitcoin in recent months.
In the first filing, Coinbase cited possible price declines in bitcoin as one of the risk factors. According to the filing, the company has more than 43 million users trading digital assets in more than 100 countries.
Bitcoin traded at just over $ 56,000 a coin on Tuesday, according to coin figures. The cryptocurrency had never traded above $ 20,000 before December.
According to the latest filing, Coinbase plans to issue nearly 115 million Class A common shares. The company, number 10 on the 2018 CNBC Disruptor 50 list, will trade under the ticker symbol COIN.