Coinbase announced in a blog on January 28th that it plans to go public by listing directly.
The crypto exchange was founded in 2012 and allows users to buy and sell decentralized tokens such as Bitcoin and Ethereum. As a privately held company, the company has raised more than $ 540 million (about 56,430 million yen).
In December 2020, Coinbase announced that it had secretly submitted the S-1 to the SEC.
Generally, its financial status has not yet been confirmed, but it is known that it has opted out of the IPO process. Direct listings have become popular these days, and given the surge on the first day of tech IPO listings for some time, it’s not surprising that companies like Coinbase choose to go public.
Coinbase isn’t the only one to choose this path. After observing the IPO market in late 2020, Roblox postponed its IPO and chose to go public directly instead.
A direct listing eliminates the need for companies to price and sell blocks of new stock, thus skipping traditional IPO elements. Instead, the company will be able to use it for trading simply by going public. Of course, not all companies have enough name to prove themselves attractive, so directly listed companies lose the ability to raise new primary capital. Well-known and wealthy companies may find direct listings the most attractive.
In recent months, they have been very enthusiastic about IPOs of tech companies, and investors are eager to help tech companies that can support so-called “digital transformation.” If the cryptocurrency market is at the same level as the open market, Coinbase could be in a significant position when it opens.
There is a general correlation between consumer interest in cryptocurrencies, trading volume, and Bitcoin prices. Since Coinbase earns money from user transactions, it’s easy to speculate that the recent rise in Bitcoin prices has contributed to the company’s performance.
Coinbase’s announcement came in conjunction with software company Qualtrics going public on January 28, US time. The company’s share price rose nearly 50% on the same day trading alone. Further details will be announced when the cryptocurrency company submits a public application for S-1.