Coinbase unveils plans for direct stock listing

Coinbase, one of the world’s largest digital currency exchanges, has been rumored for some time to be considering a direct listing.

In an official blog post, the cryptocurrency exchange disclosed plans to pursue a direct listing of its Class A common stock, pursuant to a registration statement with the United States Securities and Exchange Commission. The Form S-1 registration statement will become effective after the securities regulator completes its review.

The direct listing format would not offer new shares but instead sell existing shares directly to the public. Some advantages of the format for those holding stock in the company can include the ability to sell without lockups, a model recently employed by Palantir and that has the potential to create "instant billionaires."

Unlike with an IPO, direct listings do not require the services of an underwriter to facilitate the sale. In addition to avoiding the lock-up period, direct listings are said to protect against share dilution.

“This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities,” Coinbase said. "This announcement is being issued in accordance with Rule 135 under the Securities Act."

The exchange first disclosed its intent to go public on Dec. 17 by submitting a draft registration with the SEC. A report from Business Insider later claimed that Coinbase intends to work with Goldman Sachs on a public offering, but no confirmation was provided at the time.

Coinbase’s last valuation, in 2018, had the company pegged at $8 billion. Crypto analytics company Messari said the exchange could be worth $28 billion after a public offering. It arrived at that valuation by analyzing the company's various business segments, including trading, custody and debit cards. 

The sphere of influence surrounding Coinbase continues to grow following several high-profile acquisitions. As Cointelegraph reported, the exchange recently acquired Bison Trails, a fully managed blockchain infrastructure provider. Also in January, the company acquired Routefire platform, helping to significantly boost trade execution.

Coinbase has recorded over $320 billion in trade volumes and boasts of more than 35 million users.