Coinbase, one of the world’s largest digital currency exchanges, has been rumored for some time to be considering a direct listing.
In an official blog post, the cryptocurrency exchange disclosed plans to pursue a direct listing of its Class A common stock, pursuant to a registration statement with the United States Securities and Exchange Commission. The Form S-1 registration statement will become effective after the securities regulator completes its review.
The direct listing format would not offer new shares but instead sell existing shares directly to the public. Some advantages of the format for those holding stock in the company can include the ability to sell without lockups, a model recently employed by Palantir and that has the potential to create “instant billionaires.”
Unlike with an IPO, direct listings do not require the services of an underwriter to facilitate the sale. In addition to avoiding the lock-up period, direct listings are said to protect against share…