2 Coinbase execs are worth nearly $1 billion after barely a year at the crypto company as its direct listing showers wealth on employees

Surojit Chatterjee, Coinbase Chief Product Officer
Coinbase chief product officer Surojit Chatterjee (left) has a stake in the company worth $657 million. CEO Brian Armstrong (right) has a stake worth $13 billion.

Coinbase, one of the world’s most popular and earliest cryptocurrency exchanges, made its public market debut on Wednesday, riding the wave of mainstream investors’ growing interest in digital currencies.

Coinbase’s highly anticipated direct listing resulted in its shares closing at $328.28 on Wednesday, giving the company a valuation of $85.7 billion – around 10 times what it was last valued at as a private company, according to PitchBook.

That’s up 31.3% from Coinbase’s reference price of $250. But because it opted for a direct listing, no shares traded at that price, instead opening at a price of $381.

Still, as Coinbase’s valuation soared, its top executives and biggest investors got substantially richer.

CEO and cofounder Brian Armstrong’s stake – 2.75 million Class A shares and 36.9 million Class B shares – is now worth a combined $13 billion.

Two Coinbase executives, Chief Product Officer Surojit Chatterjee and Chief Legal Officer Paul Grewal, both of whom joined the company less than 15 months ago, have stakes worth a combined $957 million.

At Wednesday’s closing price, Chatterjee’s 2 million Class A shares are worth $657.2 million, while Grewal’s 915,331 Class A shares are worth $300 million.

Chatterjee joined Coinbase in January 2020 after having previously been at Google for 11 years. Grewal joined just last summer, leaving his four-year tenure as a vice president and deputy general counsel at Facebook.

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Coinbase climbs 13% in trading debut as valuation hovers around $100 billion

Coinbase CEO Brian Armstrong
Coinbase CEO Brian Armstrong

Shares of Coinbase climbed as much as 13% on Wednesday in its hotly anticipated trading debut on the Nasdaq.

The direct listing had a $250-per-share reference price, and opened at $381 before hitting an intraday high of $429.54, which was 13% above its opening price.

The $381-per-share opening price put Coinbase’s valuation at $99.5 billion, giving it a bigger market capitalization than such established US companies as General Motors, FedEx, and Gilead Sciences.

Coinbase is the first major cryptocurrency exchange to go public, and investors see its direct listing as a major milestone for bringing cryptocurrencies in the mainstream. Bitcoin hovered near an all-time high above $63,000 when trading commenced, having hit a record of $64,869.77 earlier in the day.

“We look at the Coinbase listing as an additional validation of the space, and a major PR opportunity for the entire industry to shine as the future of finance,” said Alex Mashinsky, CEO and co-founder of Celsius, a cryptocurrency yield-earning platform.

He added: “Coinbase has more users and more revenues than many of the largest Wall Street players and is more profitable than any major exchange, this validation puts most skeptics at a crossroads having to re-evaluate their denial and frustration with the disruption coming at them from all sides.”

Read more: Bitcoin is a headache to store, and that’s created an investment opportunity that could theoretically pay determined traders big risk-free returns by December

Coinbase’s direct listing comes on the heels of its blowout first quarter earnings. The cryptocurrency exchange and brokerage revealed first quarter revenue grew 840% year-over-year to $1.8 billion, compared to the $1.3 billion for all of 2020.

The results led DA Davidson analyst Gil Luria to up his price target for COIN to $440 from $195 .Though other analysts caution that Coinbase has hefty competition.

David Trainer, New Constructs CEO, said in a stock research note that Coinbase’s $100 billion expected valuation implies that Coinbase will become the largest exchange in the world by revenue, which isn’t guaranteed given the existence of competitors like Gemini, Kraken, and Binance.

In the earnings report, the company warned that its financial results have fluctuated drastically on swings in crypto trading volume-something investors should keep an eye on, Trainer said.

“Trading volume, and therefore transaction revenue currently fluctuate, potentially materially, with Bitcoin price and crypto asset volatility. This revenue unpredictability, in turn, impacts our profitability on a quarter-to-quarter basis,” Coinbase acknowledged in its prospectus.

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Coinbase rival Kraken could go public next year after a surge in bitcoin trading volumes

Screenshot 2021 04 09 at 09.37.54
Kraken co-founder and CEO, Jesse Powell.


Kraken is considering a stock market listing next year after the crypto exchange saw record bitcoin trading volume in the first quarter of 2021, CNBC reported on Thursday.

“We’re looking at being able to go public sometime next year,” Kraken CEO Jesse Powell told CNBC. “It would probably be a direct listing, similar to Coinbase.”

Kraken saw a massive boost from bitcoin hitting an all-time high of $61,725 in mid-March, Powell said, as a number of institutional investors piled into the space. He said any volatility is good for the company, but is even better when prices are going upwards.

Four times as many users signed up to Kraken in the first quarter than did in the second half of 2020, according to CNBC. Spot transaction volumes hit a record $160 billion in the same timeframe, or about 1.5 times higher than last year.

“The first quarter just completely blew away the entirety of last year,” Powell said, adding that the company beat last year’s numbers by the end of February and the whole market “really just exploded.” The total value of the cryptocurrency market exceeded $2 trillion this week after doubling in just two months.

Kraken is currently in talks with investors about another round of fundraising that could give it a valuation of $20 billion. The CEO said this is being delayed in order to evaluate how Coinbase’s IPO performs. But they aren’t in a rush to raise capital.

US rival Coinbase is set to go public on the Nasdaq next week at an expected valuation of $100 billion. The exchange reported preliminary revenues of about $1.8 billion for the first quarter and said it has 56 million verified users.

Companies that choose to go public via direct listings, like Spotify did in 2018, avoid paying hefty fees to investment banks that otherwise act as underwriters in a traditional IPO.

Instead, employees and investors convert their shares into stock that gets listed on a stock exchange. These can then be publicly purchased. Investors can then cash out without having to consider the lock-up period – the length of time after a traditional IPO during which shares cannot be sold by insiders.

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Car-rental app Turo aims to list shares publicly in 2021, report says

andre haddad turo ceo
  • Car-rental startup Turo aims to list its shares publicly in 2021 after a strong end to 2020, the company’s CEO told The Wall Street Journal in a report published Friday.
  • Turo allows people to offer their private vehicles for rental, a car-sharing alternative to industry giants such as Hertz or Avis.
  • CEO Andre Haddad isn’t yet sure whether the company will pursue a traditional IPO or an alternative like a blank-check-company merger, according to The Journal.
  • The startup slashed costs and laid-off workers in 2020 to shore up extra cash. Those actions helped the company cut its second-half loss to $7.2 million, down from $46.9 million in the second half of 2019.
  • Visit Business Insider’s homepage for more stories.

Turo – a car-sharing app – plans to publicly list its shares in 2021 following a strong 2020 performance, The Wall Street Journal reported on Friday.

The startup ended 2020 in a healthy financial position despite the coronavirus pandemic. Layoffs and slashed marketing costs extended Turo’s cash runway by three years, and the company reported its first profitable quarter in 2020, according to the report. Turo CEO Andre Haddad expects the company to turn a full-year profit in 2022.

Turo’s website allows users to rent their own cars, whether they’re compact sedans or high-powered supercars. Those looking to rent private vehicles can then select from Turo’s marketplace instead of offerings from a legacy company like Hertz or Avis. Turo takes a cut of rentals’ revenue. 

Read more: Wall Street’s biggest firms are warning that these 7 things could crash the stock market’s party in 2021

Haddad told The Journal he is undecided on whether the company will raise capital with a traditional IPO or pursue an alternative method for listing shares. Direct listings, in which companies list shares without raising any capital, have grown increasingly popular with tech companies.

Merging with a blank-check company could also take Turo shares public. Special-purpose acquisition companies flourished in 2020 and drove record levels of IPO fundraising throughout the year. The companies raise cash through public offerings and use those funds to acquire a private firm. The merged entity then trades publicly.

Turo projects to reach a record $153 million in sales for 2020, according to The Journal. Losses in the second half of the year are estimated to fall to $7.2 million down from $46.9 million in the second half of 2019. Second-half revenue is set to land roughly 7% higher from the year-ago period too, The Journal reported.

Some of the company’s improved performance can be tied to the pandemic and its effect on travel. With air and cruise travel hit hardest by the health crisis, car rentals offered one of the few methods to get away from home in relative safety. The private-rental marketplace might also receive a boost from a pickup in auto sales through the pandemic.

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