Kraken Postpones IPO Due to Coinbase Failure
One of the largest American cryptocurrency exchanges Kraken decided to postpone the "publicity", looking at the "success" of Coinbase. The CEO of the exchange said this during an interview with Fortune.
Jesse Powell, who previously reported that his exchange is seriously considering an IPO before 2022, has now expressed doubts about this. Instead of listing directly, the Kraken team is looking at a more traditional IPO approach. That being said, back in the winter, Powell argued that they could follow in Coinbase's footsteps with a direct listing. But then he was not obsessed with the preliminary assessment of the exchange.
Powell was apparently equally embarrassed by the results of Coinbase, which was valued at $68.1 billion and then collapsed to $47 billion today. This happened as a result of a drop in the value of COIN shares from $328 after listing on the NASDAQ to $223.73 at the moment. Thus, since its appearance on the stock exchange, COIN “sank” by 31.85% in less than two months.
Now CEO Kraken believes that his colleagues made a fatal mistake by choosing the “procedure” of direct listing to achieve “publicity”. Powell suggested that in the case of an IPO when investment banks are in a position to control the price of shares, their value remains more stable than in the case of a direct listing. Especially considering that in the course of the latter, the market itself determines the price, and shareholders can sell the company's securities, which also affects their value due to the increased supply.
The head of Kraken noted that he still intends to list shares of the exchange on the stock market in 2022. He also did not change his attitude towards the option of a merger with another company, immediately discarding it due to the scale of the exchange. By that time, according to Powell, institutional investors will begin to trust the industry even more, and Kraken himself will be able to conduct a more detailed analysis, having studied all the pitfalls, having before his eyes a not very successful example in the form of Coinbase.
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