By Samuel Indyk
Investing.com – In a filing with the US Securities and Exchange Commission, released to the public on Thursday, Coinbase said they plan on shunning the traditional IPO process and instead go with a direct listing, where no new shares are sold and existing shareholders are allowed to sell stock.
The announcement means Coinbase is another step closer to listing shares on the NASDAQ stock exchange.
Financials
The crypto exchange said diluted earnings per share was $1.40 in 2020 on $1.28bln of revenue.
96% of their net revenue comes from transaction fees with an average of 2.8mln monthly transacting users. In total, the company said they had 43mln verified users at the end of 2020.
Cryptocurrencies
The listing comes as cryptocurrencies trade near record highs after a monster run to start the year. The market cap of bitcoin recently broke above $1tln but has since pulled back, however, the world’s largest cryptocurrency still trades above $50,000 per coin.
A successful listing of Coinbase will provide further impetus to those who expect the digital assets to continue to rally as cryptocurrencies become more widely accepted. Earlier this month, Tesla announced they had bought bitcoin to diversify reserves and other companies such as Bank of New York Mellon (NYSE:BK) and Mastercard (NYSE:MA) have said they are getting into the space.
Direct Listing
Choosing to go with a direct listing means that Coinbase will be selling shares directly to the public with no intermediaries or underwriters involved, as is the case with a traditional IPO. It also means the company will not be issuing new shares.
Other companies to have gone down this route, rather than the traditional IPO include Spotify and Slack.