Coinbase Global Inc, the best-known U.S. cryptocurrency exchange, is planning to go public through a direct listing. The San-Francisco based company announced in its official blog that it had filed the initial public offering documents with the Securities and Exchange Commission.
The American crypto company will neither use the traditional IPO process nor hire a special purpose acquisition company (SPAC) to go public. Instead, Coinbase is planning to use the direct listing option to show its existing privately held stock on a public exchange.
Coinbase founded in 2012, has now become the largest U.S. registered cryptocurrency exchange will be the first American cryptocurrency exchange to list on the stock market. Now the public can see the company’s financials as Coinbase refused the traditional IPO process.
In December 2020, the cryptocurrency exchange had confidentially submitted a registration statement on Form S-1 with the Securities and Exchange Commission.
Direct listings are gradually gaining popularity; some high-profile and consumer-facing technology companies are opting for this path to public markets. Slack Technologies, Spotify, Asana, and Palantir, decided to go public through direct listings. Roblox, an online video game company, will soon go public through a direct listing.
Choosing an option of direct listings provide mutual benefits to the company and its investor. In fact, direct listings are the most economical options that allow companies to skip traditional IPO elements by eliminating the need to price and sell a block of new equity. Direct listings allow companies to list their shares, which can be available for trading. In short, it is the most attractive option for the richest and high-profile companies.