Cryptocurrency News

Kraken reconsiders direct listing plan after Coinbase underperform

Jesse Powell is reconsidering Kraken’s plan to go public at the end of 2022, following the disappointing performance of Coinbase Stock (COIN) since its April 14 launch.

Speaking with Fortune on June 11, Powell said that in light of the performance of Coinbase’s direct public offering, the firm is now considering an initial public offering (IPO) more “seriously” than the firm is looking at avoid potential issues Presents a direct listing:

“With no lock-up, billions of dollar insiders would be able to dump their shares on, you know, the first day […] I think it is having an impact on the market.”

“And, you know, the IPO is a very different process,” he said. Kraken started discussing the idea of public list In March, following Coinbase’s plan to pursue direct listing on Nasdaq.

Powell then suggested in April with a timeline that the firm was looking to potentially go public sometime in 2020, and told Cointelegraph that its public listing would be “too large” to go through the route of one. special purpose acquisition company (SPAC).

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The roadmap is still not entirely clear, with Powell saying in an interview with Fortune that “we’ll see what the market looks like in the second half of next year,” before deciding which approach to take for public listings. .

“That’s where we’re targeting. You know, hopefully by then we’ll have more analyst coverage and another track record of growth for the industry,” he said.

Coinbase’s stock coin launched on April 14 with a price of around $327, and despite the enthusiasm leading to the firm going public, its Display Has been huge – down about 32.4% to $221 as of today, accordingly For data from TradingView.

During the interview, Powell mentioned that COIN’s weak performance may be partly due to traditional finance and anti-crypto sentiment held in Wall Street. Kraken CEO There seems to be a lot of players who “really have a lot to lose” from crypto’s success, and predicted that many players would oppose it “as long as possible”, noting:

“I think you may be seeing people facing this cognitive dissonance becoming increasingly aware of the impending doom that is coming to the legacy financial system.”

Patrick O’Shaughnessy, an analyst at Raymond James, an independent investment bank with a net of $17.76 billion, said in a note to clients regarding COIN on June 10 that:

“We do not see a structural barrier to entry here and therefore expect significant pricing declines over time, with growth in non-transactional revenue working hard to offset this.”

From O’Shaughnessy’s perspective, Coinbase relies heavily on transaction fees to generate revenue, and expects the market to offer a cheaper alternative in the near future.

“We think long-term retail customers will happily continue to pay 1%+ transaction fees, especially if/when trusted financial institutions start offering trading and custody,” the analyst said.

Raymond James rates COIN as “underperforming,” which is the label a firm gives to assets that it expects to underperform the S&P 500, or its sector, within the next six to 12 months and It should be sold.

Powell was also asked whether there would be an option to publicly exchange crypto through a Special Purpose Acquisition Company (SPAC), and he confirmed the views he had previously expressed to Cointelegraph:

“It may have been possible a few years ago, but today I think we’re too big to actually consider doing SPAC. So we’re still on track for a public listing.”