Coinbase is currently opting for direct listings rather than the traditional IPOs, in order to avoid diluting its existing shareholders and handing over cheap stock to new investors
A direct listing involves making stocks available to the open market without issuing new shares. Unlike an Initial Public Offering, a direct listing doesn’t require any underwriters, and it’s not typically used as a means of raising capital.
The decision means that, the San Francisco-based cryptocurrency exchange Coinbase can float its shares on an exchange without hiring a financial institution to underwrite the settlements.
Coinbase IPO is regarded as a milestone by many in the cryptocurrency world, who believe it will help confer legitimacy on an industry long regarded with distrust by regulators and many traditional investors. It also marks another step in the growing convergence of crypto and conventional finance.
A direct listing seems to be the popular route these days to some companies rather than IPO. The popular video game company Roblox opted to choose a direct listing and several others are choosing to debut on public equity markets.
What this means: Coinbase crypto company can sell shares directly to the public without dealing with marketing new equity and the need for investment banks to underwrite transactions.
2, Coinbase’s IPO date is expected to occur in late February or early March. The event is also expected to be significant because the price for Coinbase is likely to inform to value of numerous other cryptocurrency companies.
3. The proposed listing is expected to be pursuant to a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”).
4. The Form S-1 is expected to become effective after the SEC completes its review process, subject to market and other conditions.