Coinbase files for direct listing as Square bets on bitcoin
As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
COINBASE FILES FOR DIRECT LISTING: In a Thursday regulatory filing, cryptocurrency platform Coinbase Global (COIN) disclosed that it has filed paperwork with the SEC for a direct listing of its common stock. "On the day that our shares of Class A common stock are initially listed on the Nasdaq Global Select Market, the Nasdaq Stock Market LLC, or Nasdaq, will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price on the basis of such accepted orders," the filing noted. The company has applied to list its Class A common stock on the Nasdaq Global Select Market under the symbol "COIN." The filing stated: "We have grown quickly and in a capital-efficient manner since our founding. For the years ended December 31, 2020 and December 31, 2019, we generated total revenue of $1.3B and $533.7M, respectively, net income (loss) of $322.3M and $(30.4M), respectively, and Adjusted EBITDA of $527.4M and $24.3M, respectively."
SQUARE PURCHASES BITCOIN: Square (SQ) announced Tuesday that it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170M. Combined with Square's previous purchase of $50M in bitcoin, this represents approximately five percent of Square's total cash, cash equivalents and marketable securities as of December 31, 2020. The company said, “Aligned with the company's purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. The investment is part of Square's ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.” Additionally, CNBC’s Kevin Stankiewicz reported on Wednesday Square CFO Amrita Ahuja said the company's Cash App platform saw a boost in first-time bitcoin buyers in January. "We had 3 million people transact in bitcoin through Cash App in 2020 and 1 million who were new to bitcoin in January," Ahuja said.
MICROSTRATEGY BUYS BITCOIN: MicroStrategy (MSTR) announced Wednesday that it had purchased an additional approximately 19,452 bitcoins for approximately $1.03B in cash at an average price of approximately $52,765 per bitcoin, inclusive of fees and expenses. As of February 24, the company holds an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $2.17B and an average purchase price of approximately $23,985 per bitcoin, inclusive of fees and expenses. "The Company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin," said CEO Michael Saylor. "The company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world's most widely-adopted cryptocurrency, can serve as a dependable store of value. We will continue to pursue our strategy of acquiring bitcoin with excess cash and we may from time to time, subject to market conditions, issue debt or equity securities in capital raising transactions with the objective of using the proceeds to purchase additional bitcoin."
MARATHON CHANGES NAME: Marathon Patent Group (MARA) announced Friday that the company has changed its name to Marathon Digital Holdings, effective March 1, 2021. The name change is part of a broader corporate rebrand that reflects the company's commitment to its core competency: mining cryptocurrencies and investing in digital assets. Marathon is also constructing a new corporate website, which is expected to launch in coming weeks. "Now that we have transformed Marathon into one of the only pure-play Bitcoin investment options available, we are rebranding our Company to ensure our image better aligns with our current operations and our long-term objectives," said CEO Merrick Okamoto. "To date we have purchased $150M worth of Bitcoin and 103,060 of the industry's premier Bitcoin miners. These strategic investments demonstrate our commitment to this new asset class and our clear path to becoming one of the largest and most efficient miners in North America. The corporate rebrand, including our new name, Marathon Digital Holdings, better represents our mission and the strategy we are implementing to further grow the business."
KRAKEN SEEKS $10B VALUATION: Cryptocurrency exchange Kraken is in discussions to raise new financing in a move that would more than double the firm’s valuation to over $10B, Bloomberg’s Gillian Tan and Olga Kharif reported Thursday, citing a person familiar with the matter. The company is in negotiations with firms including Fidelity, Tribe Capital and General Atlantic and terms are yet to be finalized, but the valuation could exceed $20B depending on demand, according to the source.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin dropped roughly 12.9% this week at $46,715 in U.S. dollars, according to TradeBlock.