On December 18, Coinbase Global announced that it has confidentially submitted a draft registration statement with the Securities and Exchange Commission (SEC).
The announcement cites Form S-1, which is the initial registration form for new securities required by the SEC for public companies that are based in the U.S. Any company or security that meets the criteria must have an S-1 filing before its shares can be listed on a national exchange.
The SEC Form S-1, required by companies intending to file for an initial public offering, is also known as the registration statement under the Securities Act of 1933.
A $28 Billion IPO
Researcher at Messari Crypto, Mira Christanto, has taken a deep dive into some of the business and trading figures for the firm and arrived at a potential valuation of $28 billion.
Following Coinbase’s IPO announcement, we value the company at $28 billion. Coinbase is one of the most prominent exchanges with $1 billion daily volume in Dec-20.
Check out our model and edit it to your own assumptions. https://t.co/BQeSAxUd5j
— Mira Christanto (@asiahodl) December 18, 2020
The researcher added that the model used to derive the valuation split Coinbase’s business segments by trading fees, custody fees, debit cards, and other criteria.
The trading volume primarily comes from institutional clients, she added, but the average holdings per client are $703.
The crypto custody figure is even more impressive, growing from $7 billion held in 2019 to a whopping $20 billion, or 3.12% of the entire crypto market capitalization as reported by Tradingview at the time, in 2020.
Launched in 2012 with a seed investment from Y Combinator, Coinbase reached unicorn status in 2017, she added. Christanto cited the performance of several large institutional funds stating that equity investors are hungry for crypto exposure.
MicroStrategy, Bitwise, and Grayscale are all surging in terms of investments, assets under management, and share prices for their funds as Bitcoin hit a record price peak this week. Unfortunately for many of its users, Coinbase often grinds to a halt during Bitcoin price pumps.
Coinbase Board Reshuffles for Record IPO
The researcher mentioned a major company board reshuffle that indicates preparation for going public.
“Recently the company shuffled its board to include venture capitalist Marc Andreessen and Google veteran Gokul Rajaram along with former Cisco CFO Kelly Kramer in what appears to be final preparations for an offering that could see the company valued at $28 billion.”
According to Investopedia, this could be one of the largest IPOs ever, beating industry giants such as Facebook ($16 billion), Visa ($18 billion), and even possibly e-commerce behemoth Alibaba ($25 billion).