Coinbase CEO and other insiders sold billion in shares on first day of trading
$5 billion in shares were sold by Coinbase insiders and investors during COIN’s first day of trading on the Nasdaq earlier this week. This according to filings made Friday with the U.S. Securities and Exchange Commission.
Coinbase Chief Executive Officer Brian Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per for total salesof $291.8 million. Based on filings made before the listing, Armstrong’s sell off is roughly 1.5% of his total stock.
It was also disclosed that Coinbase director and venture capitalist Frederick Wilson gave up 4.70 million of his shares and collected $1.82 billion. Considering the SEC filing, Wilson still holds at least 10% of outstanding COIN shares, which has a market cap of over $63 billion.
The VC of which Fredrick Wilson is a partner in, Union Square Partners also sold $4.70 million shares, through the Union Square Ventures 2012 Fund LP. Another $1.82 billion collected. Just as Wilson’s estimated total of shares, this fund also owns 10$ of COIN’s outstanding shares.
Software engineer and venture capitalist Marc Andreessen also let go of part of his holdings. The Coinbase director and holder of more than 10% of the exchange’s shares sold a total of 1.18 million shares for $449.2 million, according to various filings.
Why are they selling their shares?
For the untrained eye, the selling might seem as a “get rich quick” scheme. And perhaps one wonders, why are they selling their shares?
To answer that question, it is important to understand that in a direct listing the shares are supposed to be offered by its holders as disclosed in the company statutes. This was exactly the whole point of Coinbase’s listing and all according to the books. Nothing strange occurs here. What was new here is that we know exactly who sold what and for how much. In an initial public offering, new shares are issued by the company with the proceeds going to treasury. In a direct listing such as COIN’s, only offered existing shares are being offered.
So while the company gains no proceeds from a direct listing, there are other ways it benefits. A direct listing is a huge PR event raising global attention, which will directly feed the company’s business-model. Considering the long one this will also enable the company to more easily raise capital in the future, if required.
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Source: igaming
