Coinbase Direct Listing: Initial Valuation and Investor Gains

Coinbase, a leading cryptocurrency exchange based in the United States, has established a reference price of $250 per share for its direct listing. The company’s latest SEC filing indicates a fully diluted share count of 261.3 million. This results in a company valuation of approximately $65.3 billion.

Alternatively, utilizing a share count of 196,760,122 as detailed in its recent S-1/A filing, Coinbase’s valuation would be closer to $49.2 billion. Both calculations represent significant growth.

Valuation Increase Since 2018

Regardless of the share count used, the current valuation dramatically exceeds the company’s final private valuation of $8 billion, which was set back in 2018. This showcases a substantial increase in perceived worth.

Initial reactions to the reference price suggest it may be conservative. As Coinbase isn't directly selling shares in this flotation, it won't face the typical scrutiny associated with venture capital if the stock price rises quickly. However, a significantly undervalued reference price would be noteworthy.

Significant Returns for Early Investors

Early investors stand to realize substantial profits. In 2017, Coinbase was valued at just $1.6 billion, according to Crunchbase data.

For those who invested in earlier funding rounds, the implied valuation of $250 per share represents a return of approximately 40 times their initial investment. This is a considerable multiple.

Q1 2021 Performance Boosts Listing

The anticipation surrounding the Coinbase direct listing was further amplified by the company’s preliminary Q1 2021 financial results. Revenue experienced significant growth, increasing from $585.1 million in Q4 2020 to $1.8 billion in the first quarter of 2021.

These impressive figures have heightened interest in the company’s public debut. The strong performance has effectively fueled excitement for the listing.

Looking Ahead

Speculation is now focused on the opening price of Coinbase stock and its potential for further appreciation. The direct listing is expected to be a significant event in the financial markets.

Analysts and investors are closely watching to see how the market will value this prominent player in the cryptocurrency space. It promises to be a compelling market event.