Coinbase pre-IPO private market share auction gives firm estimated $100 bln valuation
Leading cryptocurrency exchange Coinbase’s valuation is being estimated at around $100bln after its private market auction ended last week.
According to a report from Bloomberg, sources privy to the details of the private market auction on the Nasdaq’s secondary market indicated that Coinbase shares had been trading at between $350 and $375 which values the company at around $100 bln.
It’s understood that the private auction market on the Nasdaq will be the last time investors have a chance to trade the private stock before Coinbase finally goes public at the end of March.
As reported in early February by The Daily Chain, Coinbase opted to list its shares on the Nasdaq after the cryptocurrency exchange announced that it would carry out a direct public listing instead of an initial public offering which had been touted late last year.
A number of factors will have compelled Coinbase to decide on a direct listing over a full on IPO, as the former can be carried out more quickly, does not dilute a company’s shares and avoids a lockup period of company shares.
A direct public listing involves selling existing, outstanding shares without the use of an underwriter. No new shares are created and there is no ‘middleman’ involved but the caveat is that there is no guarantee that shares will sell.
As noted by Bloomberg, the price of Coinbase’s shares in the private auction market does not necessarily mean that the firm’s stock will trade at those prices but the value of shares at auction can be used to help develop a reference price for investors.
Valuation keeps climbing
Coinbase’s valuation has constantly risen after it was formally confirmed that it would be looking to take the company public in December 2020. Nevertheless in the space of three months that valuation has quadrupled to the region of $100bln, while predictions of the value of the company had varied during this period.
Morgan Creek Digital co-founder Anthony Pompliano suggested that the company could price the IPO between $20 billion and $30 billion due to its annual revenue numbers likely being in excess of $500 mln. Cryptocurrency analytics firm Messari also offered a similar prediction for the potential valuation of the IPO, arriving at an estimated $28bln valuation of the IPO.
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