The Coinbase CEO sold 749999 shares of COIN on the first day of the offering

Sithara007

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Quote from: omone1 on April 25, 2021, 06:03:29 PM

He sold his own stock at a higher price, to get rich the more, this way he can buy at a lower price. God saved me, wanted to buy high, I kept back my hit button. The coin has a great future for sure.

He may or may not purchase it back. As per reliable sources, he received $292 million from the sale. I don't know how the IPO/direct listing sales are taxed, but taking a conservative rate of 40%, he will be left with some $175 million in hand. Why should he spend that money to purchased the stocks he just sold? That makes no sense, as he has already paid a 40% tax. My guess is that Brian Armstrong will continue to sell a part of his stock holdings at regular intervals.

omone1

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He sold his own stock at a higher price, to get rich the more, this way he can buy at a lower price. God saved me, wanted to buy high, I kept back my hit button. The coin has a great future for sure.

TheGreatPython

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I am not going to lie I got some of it myself, and I got it a bit higher than right now so I am 15% down right now. However I do believe in the future of this company without a doubt. Sure maybe I bought at wrong price and if I waited a little while longer ı may have ended up with more, that is understandable, but right now it is the start and it was overpriced but it will eventually grow bigger and bigger.

Remember this company makes profit the more people trade, they make their profit from trading fee, which means they do not even need more customers and they would still profit a lot from the current customers trading, on top of that bitcoin will get more and more common and that is why it will get bigger and bigger. This is the reason why I believe in this project, it will get super high and it will profit a lot. I personally feel like it is a good thing to buy right now, even if CEO is selling.

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Quote from: tygeade on April 21, 2021, 08:59:05 AM

So the idea behind for selling 749,999 shares is to buy back at cheaper levels? I am not seeing most other corporate are following this kind of strategy. When those inside people who are responsible for further growth are not holding, then who else?

Not a bad strategy at all, if you ask me. I just checked the NASDAQ website and the P/E for Coinbase stands at 180.21. At this level, the stock definitely looks overpriced (although we have stocks such as Tesla, which have P/E as high as 1,000). Also considering the number of stocks he own, the 749,999 figure mentioned here represents just a small fraction. It is not going to change the share holding pattern in a major way.

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Quote from: dothebeats on April 22, 2021, 01:37:54 PM

That seems to be normal? Most of the top execs and insiders would probably want to sell some shares for 'distribution' and buy them back in once the price is cheaper. With the case of Coinbase, their stock prices would definitely be tanking for quite some time since the valuation they received is somewhat inflated, as was analyzed by some traders and trading circles. This means that Armstrong would have an easier time to buy back shares, as the prices are way cheaper than he sold it before. Just casually inflating their net worth with no sweat.

That's not why, it's for diversification. If you've accumulated significant value in what was previously an illiquid asset (Coinbase stock), you cash out as soon as you can (once it becomes liquid) to diversify into other assets and reduce your risk of having so much value tied to one specific asset.

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That seems to be normal? Most of the top execs and insiders would probably want to sell some shares for 'distribution' and buy them back in once the price is cheaper. With the case of Coinbase, their stock prices would definitely be tanking for quite some time since the valuation they received is somewhat inflated, as was analyzed by some traders and trading circles. This means that Armstrong would have an easier time to buy back shares, as the prices are way cheaper than he sold it before. Just casually inflating their net worth with no sweat.

(o)(o)ilikeboobs(o)(o)

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Quote from: tygeade on April 21, 2021, 08:59:05 AM

Quote from: (o)(o)ilikeboobs(o)(o) on April 20, 2021, 03:19:39 AM

To make a valuation of Coinbase needs to observe investor adoption and market trends over a long period of time.

I think the adoption will be much over a long period. I’m saying based on the rate at which people are accepting it at this time, and also for the fact that they are the first to go public, they will be kind of stealing the spotlight.

Obviously, they have too many advantages as you say they were the first to pave the way when they were the first crypto company to raise an IPO and be listed on the largest US stock exchange.
Their profit taking is also a very normal event because they don't think they are making such a good profit.
Maybe they will regret their job as the value of Coinbase's shares increases the way UNI or 1inch did. I can only imagine that much.

tygeade

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Quote from: (o)(o)ilikeboobs(o)(o) on April 20, 2021, 03:19:39 AM

To make a valuation of Coinbase needs to observe investor adoption and market trends over a long period of time.

I think the adoption will be much over a long period. I’m saying based on the rate at which people are accepting it at this time, and also for the fact that they are the first to go public, they will be kind of stealing the spotlight.

Quote from: Sithara007 on April 20, 2021, 10:37:20 PM

As per the 8-K filing made to the SEC, Armstrong holds a total of 2,753,924 Class A shares and 36,851,833 class B shares of Coinbase. Marc Andreessen owns 5,516,037 Class A and 23,961,498 Class B, while Fred Ehrsam and Fred Wilson owns more than 10 million shares.

So the idea behind for selling 749,999 shares is to buy back at cheaper levels? I am not seeing most other corporate are following this kind of strategy. When those inside people who are responsible for further growth are not holding, then who else?

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Quote from: Sithara007 on April 20, 2021, 10:37:20 PM

Quote from: jaysabi on April 20, 2021, 04:54:07 PM

There's an extra digit in the title that's bothering me. OP title says 749,999 shares, but the post says 74,999 shares. Huge difference.

It's 749,999 and not 74,999. Brian Armstrong sold shares worth $292 million at an average price of $389 per share. Still the number of shares sold is a small fraction of his overall holding in Coinbase. As per the 8-K filing made to the SEC, Armstrong holds a total of 2,753,924 Class A shares and 36,851,833 class B shares of Coinbase. Marc Andreessen owns 5,516,037 Class A and 23,961,498 Class B, while Fred Ehrsam and Fred Wilson owns more than 10 million shares.

Thanks for the correction. In that case, the first post is missing a digit in the number of shares sold and it's bothering me. OP title correctly says 749,999 shares but the first post says 74,999 shares. Huge difference.

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Quote from: jaysabi on April 20, 2021, 04:54:07 PM

There's an extra digit in the title that's bothering me. OP title says 749,999 shares, but the post says 74,999 shares. Huge difference.

It's 749,999 and not 74,999. Brian Armstrong sold shares worth $292 million at an average price of $389 per share. Still the number of shares sold is a small fraction of his overall holding in Coinbase. As per the 8-K filing made to the SEC, Armstrong holds a total of 2,753,924 Class A shares and 36,851,833 class B shares of Coinbase. Marc Andreessen owns 5,516,037 Class A and 23,961,498 Class B, while Fred Ehrsam and Fred Wilson owns more than 10 million shares.

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Quote from: The Sceptical Chymist on April 19, 2021, 12:29:31 PM

Yeah well, most insiders of privately-held companies just can't wait to cash out once they go public--so this news isn't exactly shocking. The same thing happens after a lot of IPOs, and there's nothing particularly sinister about it (or newsworthy, for that matter).

Looking at the above chart, the CEO was fortunate to sell at the prices he did--but who knows what the stock is going to do in the future. From my brokerage's analysis page, COIN appears to have a P/E of 208, so I'd say the stock is seriously overvalued. If Coinbase were a company that was growing like crazy, that P/E might be acceptable to some investors, but I'm not sure how much they're actually growing their business. I betcha COIN will see much lower prices in the coming months.

No one is pricing a company like COIN based on the present earnings. It's a speculative investment on how much it's going to earn in the future and how big this market can become. In that sense, it's no different from ultra speculative equities like Tesla, which also trades at a valuation that makes zero sense in the present. Also, pretty fitting if you ask me that COIN itself is a speculative investment considering it's built upon buying a speculative asset like crypto.

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There's an extra digit in the title that's bothering me. OP title says 749,999 shares, but the post says 74,999 shares. Huge difference.

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By the millions he had gotten from selling at the price of more than $400, he could buy more of his shareholding again while has more profit to enjoy. Making money is sure easy when you are the CEO and knows the market price became too high already. It becomes just like how the crypto markets react when a coin is listed on the exchange.

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Quote from: bryant.coleman on April 20, 2021, 01:50:14 AM

Good for him. He sold his stocks at peak levels. I am actually surprised that he didn't sold more of his shares. Remember that Coinbase went for a direct listing and not an IPO. In case of an IPO, then I would have expected Brian Armstrong and the other promoters to offload a few billion USD worth of shares (which is normal with any IPO). So this amount ($292 million) doesn't sound too high. He may sell more of his shares in the coming days and weeks.

Sure he’s lucky that he sold at that rate. But, I don’t think the rate this has dropped now is the rate it’s going to remain, it’s still going to be growing in the future, it’s just with time and when there are more investors coming you will start seeing the value of the company increasing and that would mean more profit for the investors.

So this is just the start point, the value it’s likely going to reach in the future will be way more higher than the value it started with now.

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CEO selling that much is not the news there, obviously he would love to cash out, he is the CEO and he wanted to be finally be paid and get out of this waiting period, he wasn't paid like this at all, and now that IPO happened he was free to sell on the market and then get paid finally.

The great news for him and the shocking for us is that he managed to sell as much as 410 dollars, by calculation he sold about 292 million dollars according to the news, that is a lot, that is really a lot, the average comes down to 389$ per share when he sold, we all know it started at around 250$ so he waited for it to pump and didn't sell it right away, that is the great news for him.

I think I would have done the same thing if it was me in his place, who would say no to nearly 300 million dollars, even if you could have one billion if you waited, I would still not wait and risk it.

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Quote from: laredo7mm on April 20, 2021, 10:55:44 AM

How you will determine the price of Dogecoin? In crypto, it is not necessary to have a good development company or active team which I can say after seeing the price of doge. If a useless coin can go more than 7500X then it won't be so hard for a well-established company to manipulate the market. I think it could go 2 to 3X from where it is now.

but there is a difference between manipulating altcoin market and manipulating stock market.
first of all the stock market is so much bigger and has more experienced traders that can see right through the manipulation, unlike the very small altcoin market filled with newbies that fall for the manipulation every single time.

secondly if someone tries manipulating altcoin market the final result is possible profit but if someone tries manipulating stock market the final result is an investigation into this illegal act and eventually arrest and jail time in addition to a big fine.

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Quote from: casperBGD on April 20, 2021, 06:49:49 AM

Quote from: The Sceptical Chymist on April 19, 2021, 12:29:31 PM

~snip
I betcha COIN will see much lower prices in the coming months.

agree, I also expect to see COIN down from these levels, not counting eventual bear market, which could see it much lower than initial price

on the other hand, as I saw, the explanation for the sale by top official is that it is a direct listing, so if they would not sale their, who would sell which, since they were the only ones with shares, make a bit sense, it is not that direct listings are usual situation on stock exchange
they were fast to list in a bull market, and the price was high on listing, but valuation is high above competition, P/E 208 is insane with their growth prospect at the moment

How you will determine the price of Dogecoin? In crypto, it is not necessary to have a good development company or active team which I can say after seeing the price of doge. If a useless coin can go more than 7500X then it won't be so hard for a well-established company to manipulate the market. I think it could go 2 to 3X from where it is now.

casperBGD

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Quote from: The Sceptical Chymist on April 19, 2021, 12:29:31 PM

~snip
I betcha COIN will see much lower prices in the coming months.

agree, I also expect to see COIN down from these levels, not counting eventual bear market, which could see it much lower than initial price

on the other hand, as I saw, the explanation for the sale by top official is that it is a direct listing, so if they would not sale their, who would sell which, since they were the only ones with shares, make a bit sense, it is not that direct listings are usual situation on stock exchange
they were fast to list in a bull market, and the price was high on listing, but valuation is high above competition, P/E 208 is insane with their growth prospect at the moment

slapper

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Stock always has a high volume from institutional investors, banks, and the government. And fundamental analysis moderately works with stock. Right now, it is apparent that COIN stock is quite overrated and that is why even Coinbase CEO decided to sell a lot of his shares on the first day. If I had a chance to buy Coin, I would wait until it is at least lower than $300. Moreover, currently, all eyes are on bitcoin and cryptocurrency so that COIN also has some decent advantages over other stocks. Soon, when the crypto hype over, people will reconsider and make a appropriate price for it

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Quote from: The Sceptical Chymist on April 19, 2021, 12:29:31 PM

Yeah well, most insiders of privately-held companies just can't wait to cash out once they go public--so this news isn't exactly shocking. The same thing happens after a lot of IPOs, and there's nothing particularly sinister about it (or newsworthy, for that matter).

Looking at the above chart, the CEO was fortunate to sell at the prices he did--but who knows what the stock is going to do in the future. From my brokerage's analysis page, COIN appears to have a P/E of 208, so I'd say the stock is seriously overvalued. If Coinbase were a company that was growing like crazy, that P/E might be acceptable to some investors, but I'm not sure how much they're actually growing their business. I betcha COIN will see much lower prices in the coming months.

It may not appear surprsing but such behaviour don't exactly spike enough confidence in the part of investors, if the ceo can already dump part of his shares at peak price what will stop others from doing so in the next couple of days, certainly the price will dip even more judging by what is already happening, soon the real value of COIN will be determined.

(o)(o)ilikeboobs(o)(o)

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We are seeing a market cap valuation of over $ 80 billion. He has $ 13 billion and is mostly stocks so I'm not too worried about profit-taking. To make a valuation of Coinbase needs to observe investor adoption and market trends over a long period of time.

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