Coinbase's Form S-1 Registration Statement filed with the SEC became public today, shedding some light on the otherwise mostly opaque company
The good news about going public is that the inner workings of your company become public knowledge, the bad news about going public is that the inner workings of your company become public knowledge.
While going public is a great way to raise capital, it does have some major drawbacks, at least from the company's perspective.
Things that were proprietary previously or unknown may suddenly become common knowledge.
For example, we now know that Coinbase made $1.1 billion in revenue last year, and made a tidy profit of over $300 million, however, it actually lost money in 2019 as it wasn't able to generate more revenue than it's cost of operations.
Also, we now know that roughly 96% of its revenue is earned via trading/transaction fees it charges users, something that was unknown before now.
With the majority of that coming from its institutional clients:
(Source: https://www.sec.gov/Archives/edgar/data/1679788/000162828021003168/coinbaseglobalincs-1.htm)
Which is also interesting considering the majority of its revenue came from retail clients prior to 2019.
Some other interesting tidbits...
We can also see the ownership breakdown which was previously private information...
Surprisingly, or not surprisingly depending on how closely you follow these things, Marc Andreessen is the largest equity owner of Coinbase.
He holds roughly 25% of Class A stock which is what will be listed on equity markets:
(Source: https://www.sec.gov/Archives/edgar/data/1679788/000162828021003168/coinbaseglobalincs-1.htm)
But the most important part in all of this to me and probably many others, well maybe not the most important but a very import part never the less, is what they said about their Bitcoin hoard...
While they didn't say exactly how many bitcoin they hold currently, they did say they plan on holding it in the future.
Once they are publicly traded, which will likely be true in the coming months, they will join the likes of MSTR and TSLA, which hold 90,531 and 48,000 bitcoin respectively, as large publicly traded companies holding bitcoin on their balance sheet.
The private market trading implies that Coinbase will go public with a market cap between about $80 billion and $100 billion.
Imagine if they start doing debt offerings to buy bitcoin similar to what MSTR has been doing...
Stay informed my friends.
-Doc