Coinbase executive team sells Dalilang stock? Stop believing rumors

Coinbase's direct listing last week sent waves across the trading space, rivaling some of the biggest tech IPOs ever.

By the end of its first trading day, Coinbase had a fully diluted market capitalization of more than $80 billion, putting it on par with several Wall Street giants including Credit Suisse, Nasdaq and Barclays. Still, the crypto world’s attention was not on Coinbase’s positive metrics, but on how much stock its executives had sold.

In a tweet with thousands of retweets, netizens said that the Coinbase management team had sold most of their shares. But according to Coinbase’s filing with the U.S. SEC, The Block’s data shows that the company’s largest shareholder sold only a small portion of its shares between April 14 and 15.

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So how much stock did the Coinbase executive team sell in the first week of COIN trading?

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First, Coinbase Chief Executive Officer (CEO) Brian Armstrong sold less than 2% of his stock. In addition, Chief Financial Officer (CFO) Alesia Haas only sold 15% of her holdings after netizens misrepresented that she sold all her shares. Based on COIN’s closing price last Friday (April 16), she still holds nearly $500 million in stock.

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Emilie Choi, President and Chief Operating Officer (COO) of Coinbase and former LinkedIn M&A executive, ranks second in the percentage of sell-offs as a percentage of total holdings. Choi sold 24% of his shares in the previous two trading sessions, dumping more than 50 shares as the stock neared a high of more than $420, according to SEC filings.

Coinbase Chief Accounting Officer (CAO) Jennifer Jones sold 38% of her total holdings, the highest percentage sell-off among the executive team.

The market shouldn't be surprised that executives are selling shares. In a direct listing, no new shares are issued as in a traditional IPO. As a result, shareholders selling existing shares can ensure that there is enough supply for a direct listing.

Coinbase General Counsel Paul Grewel pointed this out on Twitter. He commented, “In order to provide sufficient supply and attract new investors, a company must sell a minimum number of (shares) in the total ownership structure table to successfully go public. The largest shareholders are usually investors and executives, so That means they tend to sell the most on their listing day.”

The chart below shows the amount of shares sold by major Coinbase shareholders during the week of April 14.

Unsurprisingly, Coinbase CEO Brian Armstrong sold the most shares (just under $300 million), but those shares represented only a small fraction of his total ownership in the company. During the same period, Choi sold just under $220 million in stock.

As for  COIN 's performance, the stock closed at  342 $ on Friday, down sharply from its trading price in the first hours of its debut. Coinbase  touched a low of  310 $ in the final hour of trading on the listing day, before closing at  16 ET at $328.28 $. It ended its first trading day with a fully diluted valuation of $85.7 billion.

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