Does Coinbase’s poor direct listing performance make emerging crypto platforms think twice before going public? The latest comments from leading cryptocurrency exchange Kraken might suggest so.
In an interview with CNBC earlier this year, Kraken CEO Jesse Powell said the company plans to go public via direct listing in 2022. Coinbase went public less than a month later, and now a few months. only after the debut on Wall Street, Powell and the company can have doubts.
The IPO … I don’t know
Kraken is one of the top 3 exchanges when ranked by volume and continues to grow. However, Kraken’s future in public listing remains a question mark. During a recent appearance on Fortune’s “Balancing The Ledger” video series, Powell said the company is increasingly considering going public, especially when it comes to direct listing.
“An IPO looks a little more attractive in light of the performance of the direct listing,” said Powell. “I would say we are taking a more serious look at it now having the benefit of seeing how the direct public offering went for Coinbase.”
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Coinbase struggling since direct listing
In just a few months, Coinbase saw its initial valuation cut by about a third, going on the stock exchange to over $ 68 billion, for a current valuation of just under $ 48 billion. The company has been in business for almost ten years and is undoubtedly still convinced of its long-term success. Additionally, the company is paving the way for other crypto-focused companies to follow suit. However, the company’s direct listing approach seems to leave investors wary and, according to Powell, has likely been a ‘watch and learn’ experience for some of the largest publicly traded crypto companies considering going public. .
Since going public via direct listing in April, it's been a steady slide for Coinbase. | Source: $COIN-NASDAQ on TradingView.com
Can Kraken crack the code?
Despite the difficulties faced by Coinbase shares, reinforced by a less-than-stellar early earnings report, CEO Brian Armstrong felt the direct listing route was appropriate. Armstrong told CNBC in April that a direct listing was “more loyal to the ethics of crypto.”
The Kraken Powell doesn’t see it quite the same way. ” I think [Wall Street] is so tied to the traditional way of doing things, ”said Powell during his recent appearance. Nonetheless, Powell did not make a commitment in one way or another to the direct listing versus the IPO – but he ruled out a “hot” public route: PSPCs or companies in the market. special purpose acquisition. PSPC is an increasingly important topic and rumor mill for emerging companies, such as crypto startup Circle.
It remains to be seen what approach Kraken and other emerging crypto companies will take, but rest assured that they are paying close attention to the market forces at work.
Related reading | Coinbase bets on Dogecoin list to rekindle stuttering fortunes
Featured image from Pixabay, Charts from TradingView.com