Coinbase valuation reaches $90 bln in a private auction before the company goes public


Dec 11, 2020
Shares of Coinbase Global Inc. were traded at an average price of about 350 USD each at a private auction held by Nasdaq, giving the San Francisco based crypto currency exchange a total valuation of about 90 billion USD, before the company goes public, Bloomberg reports citing people familiar with the matter.

The Nasdaq Private Market auction ended last Thursday and is probably the last chance for investors to trade Coinbase stocks before its public listing, which is expected to go ahead in the end of March.

In the beginning of the auction some Coinbase shares were traded at a price above 375 USD, which would have given the company a total valuation exceeding 100 USD, Bloomberg sources, who chose to retain their anonymity, said.

Because the volumes traded in private are usually much smaller than the volumes on the public market, prices are not always indicative of what the real value of the company might be. The Nasdaq Private Market is a division of Nasdaq, dedicated especially for such last minute private auctions before a company goes public.

Before Coinbase’s direct listing in the end of March Nasdaq, where the shares will be traded under the ticker symbol COIN, will still have to set a reference price for investors, which could be close but not exactly the same as the price achieved at the auction.

The Coinbase offering will be the first major direct listing on Nasdaq. Unlike a traditional Initial Public Offering (IPO), in which new shares are created, underwritten and sold to the public, in the case of a direct listing no new shares are created and only existing, outstanding shares are sold with no underwriters involved.

All owners of Coinbase’s Class A common stock will be allowed to sell in the forthcoming listing. Class A stock carries one vote per share, while Class B stocks - 20, the Coinbase filing revealed.

Last year the company’s profit reached 322 million USD, while its net revenue more than doubled to 1,14 billion USD.

That is very impressive, but at the same time still not a realistic indication about valuation of the company for the abovementioned reason. Personally, I am a little sceptical that it will be quite that high, as I am sure hype also played a role.