Cryptocurrency exchange Coinbase has reached an implied $68 billion valuation ahead of its highly anticipated direct listing on the Nasdaq.
The latest valuation is based on a volume-weighted average share price Coinbase cited in a revised S-1 filing released Wednesday. The company reported private shares trading at $343.58 apiece for the first quarter of 2021 ended March 15, which increases the company’s valuation 13-fold.
According to PitchBook data, the company was last valued at $8 billion in October 2018.
The revised regulatory filing also shows that the company has more than 196 million shares outstanding for the first quarter of 2021, resulting in the latest valuation figure. While private market value is less indicative of a company’s share worth, the Nasdaq will use that information to set a reference price for the company ahead of its direct listing.
“Those secondary market share sales help give a ballpark of where they may be valued in the public market, but we put less weight on 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 first filing in February showed the company reported a profit of $322 million last year on net revenue 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 stakes into stock that’s listed on an exchange. Founders have become increasingly disenchanted with the IPO process in recent years, leading to a boom in direct listings and special purpose acquisition vehicles.
Companies like Roblox, Spotify, Slack and Palantir went public through direct listings on the New York Stock Exchange. Coinbase will be the Nasdaq’s first major direct listing.
Exuberance around cryptocurrencies has been growing steadfast over the last year. Bitcoin, in particular, has gained more acceptance among mainstream companies and investors. Earlier Wednesday, CNBC learned exclusively that Morgan Stanley has become the first big U.S. bank to offer its wealth management clients access to bitcoin funds. Meanwhile, large companies including Square and Tesla have been buying more bitcoin in recent months.
In its initial filing, Coinbase listed potential price declines in bitcoin as one of its risk factors. The company has more than 43 million users trading digital assets in more than 100 countries, according to the filing.
Bitcoin was trading at just above $56,000 per coin on Tuesday, according to coin metrics. The crypto asset had never traded above $20,000 prior to December.
According to the latest filing, Coinbase plans to issue nearly 115 million shares of Class A common stock. The company, ranked No. 10 on the 2018 CNBC Disruptor 50 list, will trade under ticker symbol COIN.
Source : CNBC