Coinbase’s stock soars on debut, then falters

Cryptocurrency exchange Coinbase Global Inc. soared above a $112-billion valuation in its trading debut Wednesday, then fell back below its opening price as bitcoin eased from record highs and tech stocks declined across the board.

The massive valuation, which dwarfs that of more traditional financial companies including Intercontinental Exchange Group Inc. and Nasdaq Inc. itself, is a landmark moment for the crypto industry and for Coinbase, which was started almost a decade ago when few people had even heard of bitcoin and when many exchanges were run by amateurs from their garages and homes.

Coinbase shares closed at $328.28, down 14% from the $381 opening price on Nasdaq after earlier climbing as high as $429.54. At the closing price, the company’s valuation on a fully diluted basis is about $86 billion.

Bitcoin, which along with ethereum made up 56% of Coinbase’s 2020 trading revenue, slipped below $62,000 after earlier hitting a record.

The debut isn’t just a mark of success for Coinbase, which was valued at just $8 billion in its most recent funding round in 2018. It’s also a win for Nasdaq, which hosted its first direct listing after beating out the New York Stock Exchange for Coinbase’s debut. Coinbase is the biggest company to take the direct listing route to market.

Coinbase Chief Financial Officer Alesia Haas said in an interview Wednesday morning that one of the reasons that the company picked Nasdaq was because the bourse offered the ticker symbol COIN, which wasn’t part of the New York Stock Exchange’s pitch.

“Ultimately that they had the ticker COIN, and that was a really great ticker for us to get,” Haas said.

Nasdaq on Tuesday set a reference price of $250 a share for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalization.

Every major direct listing has opened significantly above its reference price, with Roblox shares debuting at $64 each — 42% higher than the number set by the exchange.

Coinbase shares changed hands at a roughly $90-billion valuation in early March, Bloomberg News reported at the time, in what was one of the last chances for investors to trade its private stock before the company went public.

Digital Currency Group founder Barry Silbert tweeted Tuesday that his shares would definitely not be changing hands at the reference price, in an early sign that the stock was set for a pop at the open.