Form S-1 review is to verify corporate data. The value of the company value was about $ 8 billion in 2018.
The exchange of bitcoin (BTC) and cryptocurrencies, Coinbase, took the first step for what will be its potential entry to the stock market or Wall Street. The company filed Form S-1 as a registration statement with the Securities and Exchange Commission (SEC) for its consideration.
The information saw the light on Thursday by Coinbase after months of rumors that the exchange was getting everything ready for its application to get listed. The company would be considering a direct listing rather than making an initial public offering (IPO).
In the direct listing, there is no creation of new shares. On the contrary, it operates with already existing shares without the participation of intermediaries. This means that investors, promoters, or employees who own shares can sell them directly to the public.
In the case of IPOs, new shares receive issuing. This action requires the participation of an intermediary to approach their distribution among investment banks, stockbrokers, mutual funds, and insurance companies.
“Form S-1 is expected to go into effect after the SEC completes its review process, subject to market and other conditions. This announcement does not constitute an offer to sell or a request for an offer to buy of any security,” this was part of the message Coinbase shared on its blog.
The next steps Coinbase must take to become publicly traded include filing Forms S-2, S-3, and preparing an informational prospectus for investors. This must include information on the issuer, its shareholders, commercial and financial information on the issuer’s business, risk factors, and the destination of the funds from the arrangement.
In the case of the SEC, the SEC’s mission is to evaluate the request and issue a comment letter on the request. In case of notable faults, it will issue a letter of every noted deficiency to the issuer with an explanation of the faults.
The exchange’s request occurs at a historic moment for bitcoin, which this Thursday reached a new top, trading at over $ 23,000 per unit. The overall cryptocurrency market is prospering due to the arrival of institutional investors, pushing the market capitalization to more than $ 660 billion in recent weeks, according to CoinGecko.
The first information about Coinbase’s plans began to spread in July when the Reuters news agency revealed that the exchange was preparing to enter the stock market. At that time, the report said that: with completed procedures, the exchange house would become the first to make a public listing.
It is important to mention that, before the financing that took place in 2018 by Coinbase, the company had a valuation of about 8,000 million dollars. It is currently one of the bitcoin exchanges with the highest volume, showing a trade up to 129 pairs of cryptocurrencies.
Valuation could amount to USD 28,000 million
According to a recent report by the Messari firm, the entry of Coinbase to Wall Street could take its worth as a company to about 28,000 million dollars. For analyst Mira Christanto, Coinbase is one of the most “prominent exchanges with a daily volume of one billion dollars”.
The study bases its argument on a data model that relates to the commercial segments of the company and also includes: commissions for exchanges, fees for custody services, debit cards, and others. According to the researcher, the exchange’s volume comes from institutional clients, but the average holding per client is $ 703.
Concerning custody services, these remained at about $ 7 billion in 2019 but grew to at least $ 20 billion in 2020, which speaks of the growth of the exchange house and the interest that the exchange continues to arouse.
By: Jenson Nuñez.
