In briefCoinbase S1 reveals the firm’s biggest shareholders. Cofounders Brian Armstrong and Fred Ehrsam have large stakes. VC firm Andreessen Horowitz and its partners are poised to make billions.
Cryptocurrency giant Coinbase is set to go public in coming weeks and, on Thursday, a regulatory filing revealed the company turned a $322 million profit in 2020. It also showed who is poised to cash in when shares begin trading.
Typically, when a company goes public, its founder and CEO holds the most shares of common stock. That’s not the case with Coinbase, however, as the filing reveals that Marc Andreessen, a partner at the prominent venture capital firm Andresseen Horowitz, is the biggest owner with just over 5.5 million Class A shares—a stake that’s worth $1.65 billion based on reports of Coinbase shares trading for $300 on private markets. That price is likely to increase when the company floats its shares on the Nasdaq in the near future.
As for Coinbase’s CEO, Brian Armstrong, he owns nearly 2.8 million Class A shares, which is worth $840 million based on private market valuations. Meanwhile, Fred Ehrsam, who joined Coinbase as co-founder shortly after Armstrong launched the company in 2012, owns nearly 2.6 million shares—while Paradigm, a hedge fund controlled by Ehrasm, owns the same amount.
These figures, however, only refer to the Class A shares, which are highly liquid. Armstrong owns the most Class B shares, which give the owners a supersize right in voting (20 times more than Class A in the case of Coinbase), and can also be converted into Class A shares.
Also on the list is Surojit Chatterjee, a former Google executive who Coinbase poached from Google to be its head of product, and who is the fourth-largest individual shareholder. Other notable names are Paul Grewal, a former Facebook executive and federal judge, who is Coinbase’s top lawyer, and Katie Haun, a former prosecutor who leads many of Andreessen Horowitz’s cryptocurrency initiatives. Also listed is Fred Wilson, an early advocate for Bitcoin whose Union Square Ventures supplied half of Coinbase’s Series A funding round in 2013.
In addition to the Andreessen Horowitz partners Haun and Andreessen, the firm itself is poised to rake in a massive sum with its stake of over 5.5 million Class A shares—a hoard currently worth around $1.56 billion.
The new regulatory filing, known as an S-1, also reveals that Armstrong and Ehrsam each sold 226,219 shares at a price of $32.57 in late 2018 for a total of $7.4 million each—a figure that would have netted them around 10 times that if they had sold this year.
The names in the S-1 filing are hardly exhaustive. Numerous other share holders, including Coinbase employees and accredited investors, are in position to cash in.
Ordinary retail investors, meanwhile, will have to wait to buy Coinbase shares until the company hits the Nasdaq, an event that is likely to take place in early March. Coinbase is going public via a direct listing, which is likely to mean a high degree of volatility on opening day. While the recent private share price of $300 is a useful yardstick, the initial public listing price could be significantly higher.