The CFO of Coinbase sold her shares for USD388.73 while its CEO sold hers for USD291,827,966. Although the sale of shares by other executives of the exchange raised doubts, analyst Scott Melker explained the reason behind it.
During Coinbase’s first day on Nasdaq, investors of the exchange sold about USD5 billion worth of shares in total. A series of filings with the US Securities and Exchange Commission (SEC) indicate this.
Coinbase is the largest cryptocurrency exchange in the United States and one of the great hopes of the sector. Its shares are listed on the Nasdaq exchange at a reference price of USD 340 per unit.
Insiders of the company sold a total of 12,965,079 shares, according to data from Capital Market Laboratories. Its value was more than USD4.6 billion at a price of USD354.38 per share, at closing time.
Coinbase CEO Holds at Least 300,000 Thousand Shares
The most prominent deals include that of Coinbase CFO Alesia Haas, who sold her 255,500 shares for USD388.73. Meanwhile, Coinbase CEO Brian Armstrong sold 749,999 shares in three transactions for a total of USD291,827,966. The executive still has 300,001 shares worth around USD1 billion.
Teasing and jokes emerged on social media and many observers compared the sales to the classic “pump and dump” scheme. In other words, insiders and team members sell their tokens on the retail market after a listing to make a profit.
Another filing with the SEC revealed how many shares Coinbase CEO and venture capitalist Fred Wilson sold. The total was 4.7 million shares that yielded a profit of USD 1,820 million. However, it is not clear to anyone how much COIN he still has.
Reasons Why Brian Armstrong Sold His Coinbase Shares
Coinbase going public will remain one of the most important moments in the history of cryptocurrencies. It symbolizes the long-awaited union between the crypto market and the traditional financial market. With this, the adoption of virtual currencies and, therefore, their price should skyrocket.
However, that feeling of joy faded when Coinbase CEO Brian Armstrong sold USD291 million of his shares in the first few hours. Several exchange executives emulated him, leading to doubts whether it had all been a trick to profit and retire.
Although that theory caused a stir on the Internet, crypto analyst Scott Melker has refuted it. He explained that the reason behind the Armstrong sale is how Coinbase went public. Buying and selling existing shares, without issuing new ones, forces holders to sell part of them, according to Melker.
“Coinbase is not selling shares. They have to sell them so that there are shares available to buy, according to the rules of a direct listing. Even if they did, no one should care as this is a free market. You should not blame someone for making a little profit after having worked for a decade,” Melker said.
Although Brian Armstrong has not commented on it, Scott Melker’s explanation makes sense, taking into account how Coinbase went public. The analyst considers that people sometimes spread rumors to affect the performance of the crypto market.
By Alexander Salazar
