Its IPO could be the biggest in tech history after Facebook. Coinbase, the world’s leading U.S. cryptocurrency buying and selling platform, reached a valuation of $ 90 billion after a private auction of its shares on the Nasdaq Private Market. This valuation is based on the price at which its share traded during this sale, ie $ 350 per share.
The private Nasdaq market is dedicated to trading in companies’ shares prior to their IPO and does not give a perfect picture of the value of the company because the trading volumes are not equivalent to those in the public markets. But in the wake of a volatile bitcoin that continues to evolve beyond $ 50,000, this XXL valuation testifies to the growing interest of investors in the cryptocurrency ecosystem.
According to the latest documents filed by the platform with the SEC, the US financial policeman, the platform now has more than 43 million users worldwide and has processed more than $ 456 billion to date. According to this report, Coinbase generated around $ 1.3 billion in revenue in 2020, more than twice as much as the previous year.
Like Spotify or Palantir, Coinbase’s IPO is planned in the form of a direct listing. Unlike an initial public offering (IPO), no new share issue is planned when it enters the market. This mechanism allows a company to go public through the sale of shares held by the founders or the first shareholders and to prevent the value of their shares from being diluted when new investors arrive.
This IPO mechanism is also much less costly for the company. Direct listing eliminates the need for financial intermediaries whose commissions can reach 7% of the amount of the introduction. While these intermediaries help set the price of the listing in an IPO, it is not until the first encounter between supply and demand in the market that the value of the stock is fixed. The real valuation of Coinbase will therefore not be known until the day the cryptocurrency giant enters the Nasdaq.