Coinbase Global Inc., a cryptocurrency exchange, soared above a $112 billion valuation in its trading debut on Wednesday, only to fall down below it, as Bitcoin dropped from record highs and tech stocks fell across the board.
The huge valuation, which dwarfs more conventional financial firms like Intercontinental Exchange Group Inc. and Nasdaq Inc., is a watershed moment for the crypto industry and Coinbase, which was established nearly a decade ago when few people had heard of Bitcoin and several exchanges were run by amateurs out of their garages and homes.
At 2:56 p.m. on Nasdaq, Coinbase shares were trading at $332.99 apiece, after climbing as high as $429.54 earlier. Bitcoin, which together with Ethereum accounted for 56 percent of Coinbase’s trading revenue in 2020, fell below $62,000 after reaching a new high.
Coinbase was priced at $8 billion in its most recent funding round in 2018, so the early rally isn’t just a sign of progress for the company. It’s also a victory for Nasdaq, which was chosen over the New York Stock Exchange to host Coinbase’s first direct listing. Coinbase is the largest company to go public with a direct listing.
One of the reasons Coinbase chose Nasdaq over the New York Stock Exchange, according to Chief Financial Officer Alesia Haas, was because the bourse offered the ticker symbol “COIN,” which was not part of the New York Stock Exchange’s pitch.
“In the end, they had the ticker COIN, which was a fantastic ticker for us to get,” Haas said.
For Coinbase’s direct listing, Nasdaq set a reference price of $250 per share on Tuesday, which is a condition for the stock to begin trading, but not a direct indication of the company’s future market capitalization. Every big direct listing has so far opened at a substantial premium to its reference price, with Roblox shares debuting at $64 per share, which is 42% higher than the exchange’s target.
Coinbase shares changed hands in early March for about $90 billion, according to Bloomberg News, in what was one of the last opportunities for investors to trade the company’s private stock before it went public.
Digital Currency Group founder Barry Silbert, who has developed a crypto empire, tweeted Tuesday that his shares would “certainly not” be traded at the reference price, indicating that the stock was poised for a strong open.
Direct listings, which have only been seen a few times, are an alternative to the conventional initial public offering. Until Wednesday, any company that pursued one was listed on the New York Stock Exchange, including Slack Technologies Inc., Palantir Technologies Inc., and, most recently, Roblox Corp.
