Coinbase (COIN) Began Trading On Nasdaq Yesterday, But Not Without Confusion And Long Delays

April 15, 2021 07:00 PM
Crypto Story of the Day

Crypto Story of the Day




Crypto prices were mixed earlier today, with Bitcoin (BTC) and Ripple (XRP) lower and the rest of the Top 10 generally strong. In spite of the generally benign price activity, spot volumes are above the 30-day average.

Crypto Story of the Day

In what will always be seen as an historic day for crypto, Coinbase (COIN) was listed and began trading on Nasdaq yesterday. Trading on the shares was characterized by confusion and long delays. The follow on effects of the listing appeared to have more impact on crypto-related equities than did tokens.

Firstly, there’s already general confusion in the media around the actual market cap that Coinbase is trading at. Bloomberg and other news outlets are somehow implying a roughly 65 billion market cap (which doesn’t seem to add with the 130 million share count they’re also quoting) at the close, making it the 7th largest listing in U.S. history. 

The S-1, however, claimed 261 million shares outstanding, which also seemed to be the figure that Nasdaq used when they set a reference price of $250 equating that to a 65 billion valuation. That share count would imply a closing valuation of about 85 billion, making it the second-largest U.S. listing of all time. 

Given that premarket trading on FTX also assumed a number much closer to 261 million, we'll reference the latter. Shares didn’t actually trade for the first time until just before 1:30 p.m. EST. 

Delays have become more common on the first day of trading for large issues following the 2012 Facebook (FB) listing, which was wrought with halts and technical issues and took blame for poor trading in the shares in the first few months. The delay arguably did have some negative impact, as FTX premarket trading began to decline from a roughly 150 billion valuation that was implied prior to the confusion. 

When shares finally did start trading, highs were made in the range of USD 430, implying a 112 billion valuation. The shares effectively traded down for the remainder of the session and were only quoted as “up'' due to the $250 “reference price” set by Nasdaq, which was completely divorced from where grey market prices had settled. 

Crypto-related equities, which had largely been rallying into the listing date, sold off aggressively. Galaxy Digital (TSX: GXLY) traded down over 15% in the session, as did Riot Blockchain (NDQ: RIOT). That said, the listing seemed to have a little impact on most cryptocurrencies with BTC, for example, holding prior-day gains and seeing modest volumes relative to recent levels.

Many in the space woke up this morning happy that the COIN IPO has come and gone, viewing it as a major milestone. Among a slew of licensing initiatives and now with the listing, Coinbase is about as blessed by U.S. regulators as any crypto business. 

Regardless of the share count disagreements, Coinbase, in spite of being less than 10-years old, is in striking distance of valuations of some of the most storied firms on Wall Street, such as Goldman Sachs (GS) and Morgan Stanley (MS), and is miles ahead of the last wave of innovators, such as Virtu Financial (VRTU). Coinbase is often described as close to a public utility in the space: its COIN shares will be looked at as an equally important benchmark.

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