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Brian Armstrong sold $291.8M in Coinbase shares on opening day
- herpderperator 5y agoIs that normally possible/allowed? What about the lockup period, doesn't that apply for 6 months?
- bald 5y agoit is for direct listings
- manuelflara 5y agoIn direct listings there is no lockup period, I believe, unlike in traditional IPOs.
- unmole 5y agoCoinbase went with a direct listing, not a traditional IPO.
- cbhl 5y ago$COIN did a direct listing, so I think execs and employees selling their shares on day 1 is working as designed? Lockup periods come from the traditional IPO process, where the company creates new shares that are sold on day 1.
- tomhoward 5y agoAs reported here [1]: Unlike most tech founders, Armstrong will be able to sell shares right away after Coinbase goes public. That’s because there’s no lock-up period as part of Coinbase’s direct listing, which differs from an IPO in that the company doesn’t raise fresh capital but instead allows existing shareholders to sell stock on the open market. [1] https://www.cnbc.com/2021/03/23/coinbase-ceo-armstrong-owns-close-to-14-billion-of-stock-before-debut.html https://www.cnbc.com/2021/03/23/coinbase-ceo-armstrong-owns-...
- mam3 5y agoSo what ? Id sell some part too if I was overnight a centimilionnaire. What am i supposed to do with this info ?
- jaytaylor 5y agoYeah, he got his! What about all that "this is only the beginning" talk? _grin_
- alwayseasy 5y agoHow can you do a direct listing without selling your shares? He had to show leadership there by selling 1.5% of his shares.
- jaytaylor 5y agoI understand, just think it's funny and slightly insane that 1.5% of his shares are worth a quarter billie. His public character may be questionable by my standards (i.e. being a non BLM supporter - atrocious), but regardless I'm still genuinely happy for him! This is an exit entrepreneurs dream of. Exciting times. :)
- jokethrowaway 5y agoI find it questionable to support a movement which think violence, burning down buildings and rioting is protesting. That said, it's easier to be honest for Coinbase than physical retail stores - BLM can't steal TVs from Coinbase
- stickfigure 5y agoNo matter how optimistic you are, you're an idiot if you don't diversify. By any reasonable standard, 1.5% isn't much.
- ForHackernews 5y ago> you're an idiot if you don't diversify That's not what the HODL gang has been telling me. Have fun staying poor, Mr. Armstrong.
- fasicle 5y agoWhat percentage of his total shares is this?
- PartiallyTyped 5y ago1.5% https://www.coindesk.com/coinbase-ceo-sold-291-8m-in-shares-on-opening-day https://www.coindesk.com/coinbase-ceo-sold-291-8m-in-shares-...
- gogopuppygogo 5y agoGood for him. Paper wealth is not real wealth if markets change and valuations drop. Glad he put something in the bank. Founders deserve a win.
- erentz 5y agoThis is apparently only 1.5% of his holdings. [1] [1] https://www.coindesk.com/coinbase-ceo-sold-291-8m-in-shares-on-opening-day https://www.coindesk.com/coinbase-ceo-sold-291-8m-in-shares-...
- smnscu 5y agoUnless my math is off, that would put his net worth in the $10-20B bracket. That is positively insane.
- ignoramous 5y agoAnd he and Coinbase are barely scratching the surface if crypto / web3 is truly in its nascent stages as claimed.
- AJRF 5y agoI agree. Coinbase is the trusted inlet to trading crypto for individual investors. One of the blockchains, Bitcoin, has a 1 trillion dollar market cap, and the next largest has 259 bn. And coinbase captures a fee of some large percentage of transactions on those. He should be worth much more.
- consp 5y agoI would really like to know how much of the bitcoin trading is bubble and/or unbacked money printing by a certain coin, and what parts is actual value. There is way too much shady stuff going on to get my involvement.
- possiblelion 5y agoIn a direct listing they have to sell, otherwise there would not be any shares on the market.
- jcims 5y agoGood for him IMHO. Anyone in here know how capital gains work with that kind of sale? Would he be taxed on the full amount?
- ant6n 5y agoDon't people at this level not use trust funds or some such, some kind of entity which owns the shares. The entity in turned is owned by the person, but as long as they don't get the money, there are little tax consequences for selling.
- darawk 5y agoIt was a direct listing. If insiders didn't sell their shares, there wouldn't be any to trade. He sold a very small fraction of his overall holdings.
- deleted 5y ago[deleted]
- beaner 5y agoThere's always some to trade if the price is high enough. Having to dump large amounts as if it's a given is something banks tell startups so they can get the equity themselves for a price they like.
- darawk 5y agoNo...it's a direct listing. There are literally no shares on the market yet. He didn't dump a large amount, either. He sold a small fraction of his holdings, so that there would be shares to trade.
- beaner 5y ago"So that there would be shares to trade." This doesn't make sense. All of the shares are available to trade as soon as the DPO happens, regardless of whether or not they exchange hands. People who want them are free to place limit orders, and if those limit orders remain unfilled, they are free to raise them until the price is attractive enough for sellers to fill. In this way, a natural equilibrium is reached where buyer and seller are both happy and engage in a trade. It doesn't take some mandatory or pre-stipulated "having to sell some amount". Anything that would attempt to influence holders to sell under the premise that they "need to sell something" to "create a market" doesn't make sense, and typically serves the interest of the people saying it.
- darawk 5y agoThe only people who own shares when the DPO happens are the insiders. The DPO cannot happen unless some of them choose to sell in that DPO.
- companyhen 5y agoThat is how a direct listing works. Too bad HN users hated on him in 2012 when looking for a co-founder instead of having an open mind.
- actuallycurious 5y agoI know this will get downvoted and what not ... I am actually wondering ... 1) Are people really concern before posting their actual thoughts on HN ( Is it not bad for a product developer to not know about actual thoughts but some carefully written words ? ) 2) Why are people on HN so pessimistic about everything ?
- ArtTimeInvestor 5y agoDo I understand it correctly, that the DPO did not put any money into the company? If so, it was a pure "Here, we built something valuable. You can have it now if you pay enough" kind of deal with the investors? Somehow this type of transaction always makes me feel a bit strange about the value of a company. Not sure if this is a rational thing or not. I think "Why did they bring it to the market at all?". What is the rationale for taking a profitable company that does not need additional funding public?
- MattGaiser 5y ago> that the DPO did not put any money into the company? Yes. No new shares were created. Shares were just sold by existing owners.
- iand 5y ago> What is the rationale for taking a profitable company that does not need additional funding public? Liquidity for investors
- ArtTimeInvestor 5y agoSince the company is profitable, couln't it simply pay out dividends?
- rocqua 5y ago> What is the rationale for taking a profitable company that does not need additional funding public? I think the main reason is to allow insiders who were compensated by stock (options) to cash those out. By creating an actual liquid market, it becomes a lot easier for people who hold the stock to sell it. In general, direct listings allow more people to put money into the company, which should see its stock price rise. Which stock-holders like. Alternatively, it creates a more accurate view of the value of a company, which might make it easier to get loans.
- kgwgk 5y agoWhat is the rationale for selling wholly or partly a profitable company to private investors, Google or anyone else? Money.
- ArtTimeInvestor 5y agoOne aspect of Coinbase I find interesting: Without the distorting action of governments printing money, interest rates might be set by market forces inside "crypto land". This might lead to a long term situation where artificially low interest rates are paid in government controlled currencies, but market prices are paid in crypto currencies. If this leads to a mass adoption of crypto-lending, then Coinbase might be where people hold their funds. Because it is even more complicated to stake coins than it is to just hold coins. Are there any forums on the internet where a serious discussion about these types of topics can be held?
- 0xfaded 5y agoIf one has the option to borrow at 0% on a currency that they believe will experience inflation, why would they choose to borrow in crypto (unless trying to short the market of course). The current problem seems now that just not enough people are willing/able to do anything productive with capital, leading to a shortage of lending opportunities. In theory this should create a buyers market for anyone wanting capital, and to some extent it has. The problem is that, for whatever reason, people choose to poor capital into unproductive assets (IMO crypto being a minor culprit compared to real-estate or share buybacks). At the higher level, I see this as a consequence of globalisation, where capital was made hyper mobile, and therefore it was applied away from home. Negative interest rates are a somewhat desperate attempt to put more capital in motion at home, but other policy has made this unattractive for anything but speculating.
- ArtTimeInvestor 5y agoYour question comes down to why there are different levels of interest rates across currencies. Why does the USA bonds pay 1.5% while European bonds pay nothing? Yes, why?
- pjc50 5y ago? US 1y bond yields are about 0.06%: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i... They're all hovering around zero due to rate targeting and failure to get price/wage inflation back up to about 2%.
- asdev 5y agowhy is this news and getting upvotes? it was 1.5% of his stake. People here really want to FUD anything crypto related in any way possible
- MattGaiser 5y agoIf this were a traditional IPO, a founder selling their stake right from the start would be a bearish sign that they do not believe in the current price. The error is in people not knowing it is a direct listing and how they work.
- andy_ppp 5y agoHow much is YC worth at this point, it’s crazy how many of the businesses they sponsor end up pre-eminent in their sector despite huge competition.
- ccity88 5y agoA quick google says the valuation of the top YC companies combined is more than $300bn, although market capitalisation is a poor way to define how big a player is or how impactful they are in their space.
- andy_ppp 5y agoSo potentially YC is a trillion dollar company if it were to float? I’d certainly buy shares in YC :-)
- tomhoward 5y agoNo! YC (assuming it's like other investment companies) is a management company, and just takes percentage. Industry standard is around 2% management fee and 20% of the gains, though it varies, and it may be quite different for YC, being quite a different kind of investment company (compared to more traditional VCs). The rest of the gains go to the limited partners (LPs) - the institutional investors who put in the money. Of course the YC partners are investors too, particularly in the early days when YC was just a structure for the original four partners to invest in startups. But these days most of the returns would go to external LPs.
- andy_ppp 5y agoEr YC owns around 7% of most of the companies it invests $150000 dollars in? The potential for them to keep adding 7% of many billion dollar companies seems very high... YC is an incubator not a VC or management company. Sure I haven’t factored in dilution but still...
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- cblconfederate 5y agothis is good for binance