Coinbase shares closed at $328.28 in their Nasdaq debut on Wednesday, giving the cryptocurrency exchange an initial market cap of $85.8 billion on a fully diluted basis.
The shares opend at $381 and quickly shot up as high as $429.54, before dropping back below the debut price and reaching a low of around $310. The price was still well above the reference price of $250 set Tuesday night, though no shares changed hands at that price.
Skirting the traditional IPO process, Coinbase listed its stock directly, allowing employees and existing shareholders to sell shares immediately at a market-based price. In pursuing a direct listing, Coinbase followed tech companies like Spotify, Slack, Palantir and Roblox, which helped standardize the process.
Excluding options and restricted stock units, Coinbase closed the day with a market cap of about $62 billion.
Founded in 2012 as a way to simplify the purchase of bitcoin, Coinbase has emerged as the most popular crypto exchange in the U.S. and soared in value alongside digital currencies bitcoin and ethereum. The service now has 56 million users, up from 43 million at the end of 2020 and 32 million the year before that. In its last private financing round in 2018, investors valued Coinbase at $8 billion.
Coinbase is hitting the public market as a record amount of cash pours into cryptocurrencies and tech investors are thirsty for high-growth stories. Snowflake, Palantir, DoorDash, Airbnb and Roblox have all gone public in the past six months and have market capitalizations ranging from $45 billion to $106 billion.
Relative to those companies and others in the IPO pipeline, Coinbase’s recent growth is unparalleled. The company said last week in announcing preliminary first-quarter results that revenue in the period surged ninefold from a year ago to $1.8 billion, and net income climbed from $32 million to between $730 million and $800 million. The number of monthly transacting users (MTUs) climbed from 2.8 million three months earlier to 6.1 million.
For full-year 2020, revenue more than doubled to $1.28 billion, and the company swung from a loss in 2019 to a profit of $322.3 million.
Most transactions on Coinbase involve the purchase of bitcoin or ethereum, which have been on a historic tear, climbing more than 800% and 1,300%, respectively, in the past year. The company has said that its short-term performance will largely be determined by crypto prices.
Brian Armstrong, Coinbase’s co-founder and CEO, owns 39.6 million shares. In August, Armstrong was granted a multibillion-dollar performance award tied to the company’s stock price, potentially letting him purchase up to 9.29 million options at $23.46 over 10 years.