Coinbase Announces April 14th Direct Listing

After much speculation, the Coinbase public offering finally has a date.

Coinbase announced that the SEC validated its proposal for a public direct listing of its stock. The ticker “COIN” will officially start trading on the Nasdaq Global Select Market on Apr. 14, 2021.

In another press statement, Coinbase also announced they would hold a conference call on Apr. 6 to discuss the financial results of Q1 2021.

These are expected to be positive as the crypto market as a whole enjoyed an excellent first quarter with levels of retail interest unseen in years.

The Apr. 6 update is well-timed to increase interest in Coinbase’s public offering.

Their strategy of foregoing a traditional IPO for a direct listing is a gamble that shows they’re quite confident in their company’s ability to attract enough investors. This listing process differs from an IPO in that the company won’t issue new stock. Instead, it will list existing stock.

This has two advantages. First, this doesn’t dilute the existing stock and current shareholders’ positions. A current shareholder sells any stock sold. Second, this doesn’t require underwriters from investment banks to sell stocks to their clients in exchange for compensation.

Coinbase’s direct listing strategy is risky because if there is too little interest for COIN, the stock will quickly lose value.

However, if the stock does well, current Coinbase shareholders will be able to sell at very high prices as the supply of new stock will be much smaller than in a traditional IPO. In the midst of an unprecedented bull market, this could be an extremely lucrative strategy for Coinbase.

Disclaimer: The author held BTC, ETH, and several other cryptocurrencies at the time of writing.