What happened half a month after Coinbase’s IPO?

So far, Coinbase is still performing relatively well halfway through its IPO.

What happened half a month after Coinbase's IPO?

Editor’s Note: Even with a small amount of bearish news, Coinbase has performed relatively well in its half month of listing.

Coinbase has been listed for half a month now, and as a cryptocurrency exchange, its performance is tied to the cryptocurrency market. Shortly after its IPO, bitcoin hit a new high of $63,000, but it also fell below $50,000 at one point two weeks later.

In addition to the volatility of the bitcoin price, Coinbase’s own stock price is also oscillating downward. Currently, Coinbase shares are down more than 30% from their first day of trading, when they peaked at $429.

While Coinbase shares are still trading above the IPO price, the downward swing has investors wondering what has happened in the half a month since Coinbase’s IPO. What are some of the major Coinbase related events to watch out for in the near future?

Executives cut their holdings on the first day of the IPO to release liquidity for the secondary market

On the day of Coinbase’s IPO (April 14), the company’s Chairman and CEO, Brian Armstrong, sold 749,999 shares at three different prices, for a total of approximately $292 million.

What happened half a month after Coinbase's IPO?

(Brian Armstrong, Chairman and CEO of Coinbase)

On the same day, the company’s CFO, Alesia Haas, even sold 255,500 shares in a liquidation sale at $388.73 per share, cashing out $99.32 million.

In addition, a number of Coinbase’s directors and executives, as well as investment institutions, have also reduced their holdings to cash out. Data show that Coinbase director Marc L Andreessen sold 294,775 shares of COIN on April 14 at an average price of $381, cashing out $112 million.

The company’s chief accounting officer, Jones Jennifer, also sold 110,000 COIN shares on April 14 at an average price of $394.86, cashing out at $43.43 million.

The following day, director Frederick Ernest Ehrsam Iii reduced his holdings by 60,997 COIN shares at an average price of $334.75; in addition to this, Frederick Ernest Ehrsam Iii sold 86,933 COIN shares at an average price of $398.65 on the same day. The two sales realized a total of $55.1 million.

On the same day, Union Square Venture, an institutional shareholder of Coinbase, also sold 4,702,324 shares of COIN stock at an average price of $386.36, cashing out at $1.82 billion.

According to statistics from GuruFocus, a U.S. data analysis site, Coinbase insiders sold a combined 12,965,000 shares at an average price of $354.1 during the period, cashing out nearly $4.6 billion.

Some analysts believe that Coinbase’s management team sold off shares right after the IPO as part of a direct listing (DPO) compliance exercise, otherwise it would not have been able to release liquidity to the market. In other words, executives “cashing out” on the first day of the IPO is a must for a direct listing, and the only way to buy shares on the secondary market is for the original shareholders to reduce their holdings.

Coinbase shares have continued to fall since its IPO on April 14, and as of April 29, Coinbase shares were trading at $298, down more than 30% from a high of $429 on the day of the IPO.

Trading code “oops”, almost delisted by European exchanges

Coinbase was listed in the Americas, but was nearly delisted in Europe.

Deutsche Boerse said on April 21 that it would delist shares of cryptocurrency exchange Coinbase from its Xetra trading system and the Frankfurt Stock Exchange by the end of the trading session on Friday, April 23, due to a lack of the necessary documents to qualify the shares on its platform.

Deutsche Börse said Coinbase’s listing, while providing a code required for trading (the so-called LEI code), was not properly linked to the listed entity. the LEI code is a 20-character unique reference, like a barcode, that allows assets to be identified in transactions and is used by regulators to regulate the market. It contains information about an entity’s ownership structure and has become a required piece of information.

A Coinbase spokesperson said: “We are aware of an administrative error that has necessitated Coinbase to resubmit certain documents to certain European stock exchanges. trading in Coinbase shares is not currently interrupted. We are working to resolve this issue as soon as possible.”

A spokesperson for Deutsche Börse said, “The only way to get Coinbase back into trading is for the issuer to apply for an LEI.”

According to the latest news from Deutsche Börse, Coinbase has been provided with the necessary reference code, the LEI code.

Funds continue to add to their positions, Coinbase target price $450

However, the minor turmoil in Europe did not affect the enthusiasm of institutional investors.

Cathie Wood, known as the “Queen of Bulls,” whose fund ARK (Ark Investment Management) bought another large amount of shares in Coinbase on April 26, with 221,167 shares, worth about $67.4 million at the closing price on that day. The value was approximately $67.4 million.

What happened half a month after Coinbase's IPO?

(Cathie Wood, founder of ARK)

On the first day of Coinbase’s IPO, ARK bought 749,200 shares of the company, worth about $246 million, and added another 341,100 shares (about $110 million) the next day

On April 20, ARK added another 236,300 shares of Coinbase stock, worth about $75.8 million at the stock price at the time.

It is worth noting that along with the Coinbase position, the fund also reduced its position in online payment platform Square Inc (NYSE:SQ) by 233,100 shares. Square currently ranks third in institutional holdings of bitcoin, while first is Micro Strategy. Inc and second is Tesla.

Sean Horgan, an analyst at Rosenblatt Securities, gave Coinbase his first Buy rating as he believes it will benefit from the growing popularity and acceptance of cryptocurrencies. Horgan has set a $450 price target on Coinbase. However, he also noted that he is more cautious in the near term as Coinbase stock is exposed to downside risk due to falling cryptocurrency prices in the near term.

First Quarter 2021 Results to be Discussed on May 13

On April 27, Coinbase announced that it will hold a conference call on May 13, 2021 at 2:00 p.m. Pacific time to discuss its first quarter 2021 financial results.

Prior to the IPO, Coinbase released a preview of its first quarter 2021 financial results showing total revenue of approximately $1.8 billion and net income in the range of $730 million to $800 million for the first quarter, a quarter that exceeds full year 2020 revenue. As of the end of the first quarter of 2021, cryptocurrency assets stored on the platform had reached $223 billion, representing 11.3% of global cryptocurrency assets. The number of authenticated users reached 56 million, a 30% increase YoY; the platform’s trading volume alone grew nearly fourfold to $335 billion.

Looking ahead to the rest of 2021, Coinbase had provided some estimates on how it will perform in the year ahead.

Coinbase stated that it could spend more than $1 billion during 2021 by stating.

“Looking ahead to full-year 2021, in order to scale our business and continue to drive product innovation, we expect our technology and development expenses and administrative expenses to be in the range of $1.3 billion to $1.6 billion, excluding stock-based compensation.”

Coinbase also said it will increase marketing spending this year: “In addition, we plan to expand our engagement and participation with customers by increasing our investment in sales and marketing. We plan for sales and marketing to be between 12% and 15% of net revenue by 2021.”

Alesia Haas, Coinbase’s chief financial officer, expects average annual revenue per user to rise in 2021. She said, “Our average annual revenue per user (ARPU) is in the range of $34-$44 per month. The lower end of this range occurs in 2018 and the upper end occurs in 2021. Our average annual revenue per user will likely exceed this range in 2021.”

Summing up

So far, even with a small amount of bearish news present, Coinbase has performed relatively well in its half month of IPO.

The core of Coinbase’s profitability model, which is the biggest support for the business, comes from the transaction fees users pay when they buy, sell or withdraw assets on Coinbase, so performance is highly correlated to the activity of transactions on the platform and the price of the coin. Although Bitcoin briefly fell through $50,000, it has nevertheless stabilized above and below $54,000 in the last week, which means that Coinbase, which currently relies on the cryptocurrency market, is still in its sunrise period. For more assessment of Coinbase, follow its May earnings readout.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-happened-half-a-month-after-coinbases-ipo/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Next 2021-05-01 15:43

Related articles