The Coinbase IPO date was recently set for April 14. It will go the route of a direct listing and trade on the NASDAQ under the ticker COIN.
And yes, you will be able to find it on Robinhood.
This will be one of the most exciting IPOs of the year, given the cryptocurrency rage sweeping the world.
Crypto exchanges like Coinbase and Binance are getting never-before-seen traffic. Coinbase users went from 2.8 million to 6.1 million between Q4 2020 and Q1 2021. That’s a 117% increase – more than double the users – in one quarter.
Bitcoin is up 728% in price over the last 12 months. Altcoins and NFTs recently made headlines as well.
Much of the surge in crypto-trading likely fueled the Coinbase IPO aspirations.
How the Coinbase Direct Listing Is Different from an IPO
The main difference between an IPO and direct listing is that with a direct listing, you are not creating entirely new shares for the public to grab.
Instead, you are enabling current private shareholders to sell their shares publicly via the public exchanges.
This carries the benefit of being cheaper than a traditional IPO. You don’t have to enlist the help of investment banks to underwrite and promote the IPO. You also avoid diluting the value of your company’s shares by adding more.
You are not creating new shares, so the requirements for disclosures to the U.S. Securities and Exchange Commission are a lot less. And you don’t work with private banks to price the shares, so the shares ideally go to market quicker.
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And that’s good news for people who want to buy the Coinbase IPO. People are chomping at the bit to get their hands on it at an IPO price.
During a traditional IPO, big institutions get a first shot at buying the stock at the IPO price, so then the price is already inflated by the time it hits the exchange. With a direct listing, everybody gets a chance.
But that could mean a lot more price movement. If it’s an exciting one like Coinbase, shares could go sky-high.
This is one of the great benefits of IPO stock trading. Until recently, retail investors would not stand a chance at getting new stocks at pre-IPO prices, if not for a direct listing.
But Robinhood might be changing that…
How Robinhood Is Changing IPOs
Last month, Robinhood announced it was working on giving its users the ability to invest in IPOs. This is big.
You see, before, you would call up your broker and see if there were any pre-IPO shares available. Sure, they might give you the time of day – if you were a 100k-net-worth individual or something.
For most retail investors, the best chance at profiting from an IPO was waiting for Wall Street to get tired of it. The stock would soar on excitement in its early days, then it would often collapse back to normal fundamental levels.
What Robinhood is doing now will change the whole system. Robinhood is making stocks available to its users pre-IPO.
That means Robinhood traders will be right in-league with the institutions buying shares early.
All that has to happen is for Robinhood to buy the shares itself and make them available on the platform it’s creating.
Even better news is that Robinhood will be making some of its own shares available on the platform pre-IPO.
There’s not yet word on when this will happen, but it will certainly disrupt the IPO status quo. We will probably know more about it when we find out the Robinhood IPO date.
It could be as little as a few weeks away, according to CNBC, and value Robinhood at $50 billion.
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