Coinbase Gives Shares to Employees as Public Listing Approaches

Blockonomi

More than 1700 Coinbase employees received shares as a “Thank you” ahead of the much-anticipated company’s listing in the NASDAQ Exchange on Wednesday 14th of 2020.

Each full-time employee received 100 shares as a result of the giveaway, which included employees all around the world. As each share is valued at $250based on the reference price set by NASDAQ on Tuesday, the gift should be worth around $25k depending on the actual price once the trading starts.

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The gift was announced to employees back on March 25th as a grant free of any kind of strings, allowing the receivers to sell them immediately after the listing or to hold them for as long as they wish.

Coinbase employees have also been able to acquire shares in recent years, with over 105k share options being already handed out until today. The company is a leading crypto company in the USA, and this move to go public will likely make it one of the top crypto companies globally.

The direct listing method chosen by Coinbase means that shares will only be available for purchase directly from current holders, which means that the number of existing shares will not be diluted once the trading starts and no other source will be available.

NASDAQ Set Coinbase Share’s Starting Price at $250

Nasdaq, in collaboration with Goldman Sachs, published an Equity Trader Alert on April 13th setting Coinbase sharer’s reference price at $250.

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While this price will surely impact the price at which the shares will be traded on their first day, it is possible for the price of the shares to be significantly higher or lower depending on the whims of the market.

The valuation of the shares, which will go by the ticker symbol COIN, places the valuation of Coinbase around $66.5 Billion. Earlier estimations by experts placed the valuation of the company somewhere around $90 and $104, significantly higher than the valuation resulting from NASDAQ’s reference price.

However, when compared with the valuation of the company resulting from the average price of private transactions earlier this year, the valuation seems to be closer to the estimated $68 billion.

As the average price in private sales was $343.58 back in March, it is still possible for the price to go up during the first days of trading in the new market, which all of the company’s full-time employees will now have the opportunity to participate in.

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An Important Milestone for Crypto

As one of the biggest cryptocurrency exchanges in the world, Coinbase’s listing in NASDAQ has been one of the most anticipated news in recent months after being suggested by Reuters earlier this year.

While it was originally believed that the company would go public via an Initial Public Offering (IPO), it was finally revealed it would be using a direct listing instead.

The biggest effect of this decision is that the price of shares is not pre-established, allowing its holders to set the price they want to sell for, a method suitable for a crypto company.

While cryptocurrency adoption has been on the rise over the last few years, it is still seen as a high-risk investment due to its technical and digital nature, which in addition to mainstream media’s depiction of it as the tool of choice for criminals, have caused people to distrust it.

The listing of Coinbase is sure to boost the cryptocurrency ecosystem by increasing its legitimacy and placing it further into the spotlight, with some experts already referring to recent activity as “the Coinbase effect”.

In recent days, it has been rumored that Kraken might be following Coinbase’s step and go public in 2020, while Changpeng Zhao says that Binance does not have any plans to go public at this time.

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Author: Nicholas Say


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