Coinbase Files Amended S-1 Form for Public Offering

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In Brief
  • Coinbase amended its S-1 filing with the SEC, registering 114 million shares to be sold on the Nasdaq Exchange.

  • The proposed maximum aggregate offering price of the shares is nearly $1 billion.

  • Coinbase initially submitted its S-1 form to the SEC in February 2021.

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American crypto exchange Coinbase amended its S-1 filing with the US Securities and Exchange Commission (SEC). This step takes Coinbase one step closer to going public.

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Coinbase has registered 114,850,769 Class A common stock to be sold on the Nasdaq Exchange, according to the prospectus. The proposed offering price for the total amount of shares is $943,218,155. 

The prospectus highlighted that this would technically not be an Initial Public Offering (IPO) because an investment bank has not underwritten it. Coinbase admitted that their share price might be more volatile as a consequence.

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Different Types of Stocks, Business

The prospectus identified two classes of common stock, Class A and Class B. The holders of each stock’s rights are identical, but they differ in voting rights and conversion. Whereas each share of Class A stock is worth one vote, each share of Class B stock is worth 20 votes. Naturally, with this amount of leverage, the prospectus detailed that Class B holders will have roughly 99.2% of the voting power. However, Class B shares must be converted into Class A shares before holders can trade them. 

According to the prospectus, Coinbase will be listed as an “emerging growth company.” The company has reduced disclosure obligations regarding “selected financial data and executive compensation arrangements.” Additionally, the reduced disclosure obligations include the date the shares will start trading, as it was left blank in the prospectus.

Coinbase and the SEC

Coinbase initially filed its S-1 form with the SEC in February 2021. Shortly after that, the company held a private auction for its shares on the Nasdaq Private Market. The current prospectus references the results of that private auction regarding its expected share price. During the auction, the sale prices fluctuated between $200 and $375, averaging at $343.58.

The prospectus also emphasized that Coinbase will not be offering Ripple (XRP) among its assets. This is pertinent in a submission to the SEC, as Ripple has an ongoing struggle with the regulatory body. Recently, Coinbase Pro announced that it would begin listing Cardano (ADA), which rose over 20% on March 16.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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