Coinbase IPO: how to buy Coinbase shares
Coinbase (COIN) is a US cryptocurrency exchange that’s set to go public on 14 April 2021. Here’s everything you need to know about the Coinbase IPO, plus how to trade Coinbase shares.
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We should also note that Coinbase will be ‘opening only’ when it lists – meaning you won’t be able to go short – until there’s a sufficient amount of shares in circulation to facilitate short selling.
What is a direct listing?
In a direct listing, a company’s employees and existing investors will convert their ownership stakes into shares that are then directly listed on a stock exchange to be purchased by institutional and retail investors. This negates the need for an underwriter, which is usually a large bank.
As a result, direct listings don’t have the same ‘safety net’ that IPOs do, because there’s no target price range for the company’s shares –something that’s usually determined by an underwriter. This means that in direct listings, share prices are completely at the mercy of market demand, which can cause increased volatility compared to going public through an IPO.
Find out more about how IPOs work, or learn how to take a position on IPOs with us.
Coinbase: a brief history
Coinbase was founded in 2012 by Brian Armstrong – who serves as the current chief executive officer (CEO) – and Fred Ehrsam. The company is headquartered in San Francisco, and it acts as a cryptocurrency exchange and broker for bitcoin, bitcoin cash, ether, litecoin and others.
What is Coinbase’s business model?
Coinbase’s business model is based on its two core products. The first is an exchange for trading the aforementioned cryptocurrencies – known as a Global Digital Asset Exchange (GDAX). The second is a user-facing platform for trading bitcoin, bitcoin cash, ether, litecoin and others.
Coinbase offers accounts to potential clients for cryptocurrency trading. In total, the company offers over 25 cryptocurrencies to its users, some of which are niche opportunities referred to as ‘altcoins’ because they are not widely known in the cryptocurrency mainstream and don’t have the name recognition of bitcoin, ether or litecoin.
The company charges a commission fee for its users to use its platform and its users can trade with leverage. It has two accounts: regular and pro. The regular account charges higher commissions, while the company’s pro account has lower commission fees for users.
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