US crypto exchange, Coinbase, went live with its direct listing on Nasdaq yesterday with a record-breaking day one market closing price.
Chinese journalist Colin Wu who goes by the @WuBlockchain on Twitter said,
"According to data from THE BLOCK, Coinbase's market closing price makes it the largest directly listed company in history, surpassing well-known companies such as Roblox (online video game platform), Spotify (streaming music service platform) and Palantir (data analysis)."
The shares fluctuated in the first hours of trading, starting at $381 and jumping above $400 but dropping to ~$330.
Coinbase Sets A Milestone, Bitcoin And Ether Spike
Coinbase is the latest company to go public through a direct listing, instead of the traditional initial public offering or a merger with a special purpose acquisition company. Coinbase CFO Alesia Haas stated,
"The reason we're doing a direct listing is that it's going to get all market participants. We're not allocating shares to just 10 institutions. This is going to be a robust, deep price discovery. And we're excited to see where that market ends up."
Its market cap exceeded $100 billion after its debut, making it the largest directly listed company in history. However, the stock fell later in the day.
The share sale has been characterized as a milestone for cryptocurrencies by analysts, traders, and economists. Coinbase will now gain exposure to mainstream stock-market investors and has a high possibility of being a catalyst to mainstream adoption of cryptocurrencies.
Bitcoin prices skyrocketed on Wednesday as well to a new high spiking above $64000. Ethereum's Ether and second-highest crypto rose to a record price of $2400.
What's Next For Coinbase?
Coinbase has 56 million verified users. The company aims at reporting its first-quarter revenue of about $1.8 billion, an 800% increase from last year's first-quarter revenue. It also expects a net income of $730 million to $800 million: Coinbase reported a net income of $32 million last year.
Coinbase's transactions involve the purchase of Bitcoin or Ether, which have climbed high in the past year. The company will focus its short-term performance based on the prices of the tokens listed on its exchange. Coinbase CEO, Brian Armstrong, tweeted:
"There's a saying that the best way to predict the future is to create it. Hopefully we helped make the future happen a little sooner than it otherwise would have in the crypto space."
Coinbase Drops From Opening Price
As the day progressed, the shares fell from their opening price to as low as $310. The original price had valued the company at more than $100 billion. Other stocks that were linked fell alongside Coinbase as well.
The initial excitement sent the shares soaring, but once it died down, Coinbase shares were still well over their reference price of $250. Coinbase board member, Fred Ehrsam, stated:
"There is bound to be a lot of volatility. That's just the nature of such a huge technology coming into existence."
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