Though most Wall Street pros missed that a gigantic record was at stake, Coinbase had a shot at becoming the most valuable new listing of any U.S. newcomer in history at its April 14 debut. Had America’s top cryptocurrency exchange been on track to finish the day at market cap of $100 billion, it would have bagged the trophy in a walk.
While waiting for Coinbase to start trading, this writer asked Jay Ritter of the University of Florida, the nation’s leading expert on IPOs and new listings, to provide a ranking of companies that boasted the biggest market caps at the close of their first day of trading. Number one is Airbnb at $86.5 billion, followed by Facebook in second place ($81.7 billion), UPS in third ($80.1 billion), and AT&T Wireless in fourth ($73.6 billion). The fifth and sixth finishers are Snowflake at $70.2 billion, and Uber at $69.9 billion. From there, the drop-off is fairly steep to DoorDash at $60.1 billion.
To reach the summit, Coinbase needed to trade at $465 by the 4 PM Nasdaq close. Getting there would just edge Airbnb’s nearly $82 billion all-time best, notched in December of last year.
At first, it looked like Coinbase was heading for a financial feat that, given the widespread view that it’s leading a revolution, would approach The Right Stuff legend Chuck Yeager’s post-war triumph in breaking the sound barrier. After opening at $381 around 1:15 PM, Coinbase quickly surged to $429. At that point, its cap stood just shy of $80 billion, narrowly trailing where Facebook and UPS ended their first trading days, and approaching second place. By 2:30, it retreated to $333, then stabilized, closing at $328.28, for a valuation of just over $61 billion.
That finish puts Coinbase in 7th place among all U.S. new listings, besting the likes of DoorDash, Kraft Foods, Palm, General Motors and Visa, and finishing $9 billion short of Uber. Amazingly, it would wax Goldman Sach’s $31 billion debut in 1999. Add inflation, and it still tops Goldman by 25%.
Measured in market cap, Coinbase is taking its place among the giants of financial services. Awarding a $60 billion plus valuation means investors expect it to become a colossus whose sales and profits soon rate alongside those of the biggest banks and brokerages. Its valuation trails that of Intercontinental Exchange, owner of the NYSE, by just $6 billion. Coinbase now worth twice as much as Nasdaq, Inc., parent of the famous venue where it’s debuting, and stands above such stalwarts as Capital One.
It’s important to note that Coinbase’s official valuation is based on shares that are trading, and doesn’t encompass options and restricted stock that’s practically guaranteed to vest. Coinbase’s registration filing discloses no less than around 64 million extra shares-in-waiting. When those options are exercised, if Coinbase’s price remains around $328 per share, its cap will be not $61 billion, but $83 billion.
Of course, rivals such as Airbnb also had lots of options ready to vest when they went public. But Coinbase appears to have far more than almost any of the others heading the list. So on a fully diluted basis, it’s probably among the top five U.S. new listings of all time. Debuting at $61 billion or so means that Coinbase doesn’t have to achieve gains in revenues and earnings nearly as stupendous as if it had reached the $100 billion many expected. Still, the market’s built a sheer slope that Coinbase must rapidly climb if it’s to enrich investors. If it slips, the slide will be long and steep indeed.
