Does the CFO hire say anything about an IPO at Coinbase?
Coinbase is moving to hire a chief financial officer in what would be a big move for the cryptocurrency platform’s growth plans.
It is also raising questions about the company’s potential plans to eventually go public. Adding an experienced, high-powered CFO is often read as a move that a business is eyeing an IPO. But that’s perhaps a less-revealing tea leaf at a financial services company like Coinbase, which could use help fine-tuning its massive, complicated business model.
Coinbase has been in late-stage talks with a number of candidates, according to people close to the company, and hiring a permanent CFO is one of its top priorities this year. Veteran CFO Tim Laehy joined the company last October to serve in the role in an interim capacity, according to his LinkedIn profile, but Laehy is not expected to stay in that role.
Other expected hires include vice presidents to handle communications and corporate development. Together, those additions would help the company manage its massive growth, which has been fueled by the surge of interest in cryptocurrencies late last year.
Coinbase declined to comment. CEO Brian Armstrong wrote a detailed post last year about how to hire senior executives, saying that it typically takes him six to 12 months to close on the right person.
The company is also continuing to fend off interest from late-stage investors, who have continued to express interest in purchasing existing shares from the company, despite a recent warning from Coinbase to knock it off in a statement issued to Recode last month. Shareholders have been approached over the last few months by people interested in investing in the company at a valuation as low as $2 billion and as a high as $8 billion — a range that shows how volatile, opaque and illiquid the market is for hungry Coinbase investors.
So the company is weighing whether to launch a new financing round that would be mostly intended to allow for some existing investors to cash out as part of a “secondary” transaction, according to people with knowledge of the company’s thinking. The round, if launched, could also have a small “primary” component, in which Coinbase raises more capital, though the company is not wanting for money.
Coinbase doesn’t officially allow secondary trading, so a sanctioned round like this would require the company’s approval. Investors in recent weeks have been negotiating whether to sell shares or buy shares — hopefully with some guidance from the company about what would be a fair share price.
A large secondary transaction would likely weaken the pressure from any existing investors for the company to soon go public so that they can finally profit off their bet. And it would satisfy the swarming investors who want a piece of it.
Coinbase has also been adding independent directors to its board, another move typically done to prepare for an IPO. Facebook’s David Marcus joined the Coinbase board in December.
The company was last valued at $1.6 billion in August — a round that occurred largely before cryptocurrency’s bull run late last year. That round was led by IVP, a late-stage firm that specializes in leading one of a portfolio company’s last private financing rounds before the company sells its shares to the public.
Fiber-optic component maker Applied Optoelectronics (AAOI) this afternoon reported Q4 revenue that missed analysts’ expectations, but beat on the bottom line, as it continued to struggle with lower sales into cloud computing operators, and forecast this quarter’s results to miss by a mile, sending its shares down sharply in late trading. CEO Dr. Thompson Lin said revenue […]
Take a look at its stock price since.
Online travel company Priceline Group announced today that it’s changing its name to Booking Holdings. The name change is fitting, as Priceline’s 2005 acquisition of Booking.com helped turn the company around — one of the few internet comebacks that actually worked.
Priceline had gone public at the height of the dot-com bubble, and subsequently saw its stock tumble. Booking.com, which had more global name recognition than Priceline.com, helped Priceline increase its more profitable international hotel booking business.
Today’s stock price of above $1,900 is nearly 30,000 percent more than what it was at its lowest point in October 2002.
Other businesses under the new Booking Holdings umbrella include Kayak.com, Rentalcars.com and OpenTable. Its stock will begin trading under the new Nasdaq ticker symbol BKNG next week.
It was worth just two Walmarts last month.
Amazon, the perpetual retail boogeyman, is now worth more than two and half times its biggest brick-and-mortar counterpart, Walmart.
Thanks to slowing e-commerce growth this past holiday season, Walmart saw its biggest one-day drop in stock price in two years — it lost nearly $35 billion in market cap since Monday. Amazon, fresh from reporting its record $1.9B in profit last quarter earlier this month, has seen its stock and market value rise about 7 percent since then.
Last year, Recode reported that Amazon, on its 20th IPO anniversary, was worth two times the market value of Walmart. That ratio had stayed nearly the same until Walmart reported earnings yesterday.
The difference in valuation come despite Walmart having approximately three times Amazon’s annual revenue and net income last year. However ,Wall Street has bought into Jeff Bezos’s vision of revenue growth over huge net income figures. It should be noted that Amazon Web Services, a non-retail business, represents a sizable portion of Amazon’s value, making up 10 percent of revenue and the majority of the company’s operating income.
Here’s how the two companies’ market caps compare over the last 10 years:
Plus, the FCC is about to publish its order overturning net neutrality rules, what if the finance industry set the rules for gun sales, and everybody gets a unicorn!
Walmart had its biggest one-day drop in stock price in more than two years after reporting a sharp slowdown in e-commerce sales in its holiday quarter. Shares dropped more than 10 percent and chipped off more than $31 billion in market capitalization for Walmart, which has been rushing to build e-commerce sales to head off Amazon’s online dominance. The company said it would shift its online strategy to acquiring new customers for its main Walmart website while slowing marketing spend for Jet, which caters to higher-income urban shoppers. [Sarah Nassauer / The Wall Street Journal]
The U.S. Federal Communications Commission is expected to publish its order overturning the Obama-era net neutrality rules tomorrow. Formal publication in the Federal Register means state attorneys general and advocacy groups will be able to sue in a bid to block the order from taking effect; publication will trigger a 60-legislative-day deadline for Congress to vote on whether to overturn the decision. [David Shepardson / Reuters]
A modest proposal: What if the finance industry set new rules for the sale of guns in America? Collectively, credit card companies like Visa, Mastercard and American Express; credit card processors like First Data; and banks like JPMorgan Chase and Wells Fargo have more leverage over the gun industry than any lawmaker — PayPal, Square, Stripe and Apple Pay announced years ago that they would not allow their services to be used for the sale of firearms. [Andrew Ross Sorkin / The New York Times]
A federal judge denied AT&T’s request to see White House communications about its proposed $85 billion bid to buy Time Warner, which was blocked in November by the antitrust division of the Justice Department. In his ruling, the judge said AT&T-Time Warner hadn’t met the legal threshold to show that they have been “especially singled out” because of President Donald Trump’s hatred of CNN, one of the Time Warner divisions. The antitrust trial, one of the biggest in a generation, is scheduled to begin on March 19. [Ted Johnson / Variety]
Russia’s election interference is Digital Marketing 101. Most of the media coverage of last week’s Justice Department indictments of 13 Russians has missed the root of the problem: The unchecked market power of social media companies. A recent study on the digital-advertising industry analyzes how the basic tools of digital marketing can be readily repurposed by agents of disinformation. Meanwhile, a New York Times investigation found that Facebook, Twitter and other social media companies often fail to enforce their own policies against identity theft and impersonation, enabling the spread of fake news and propaganda — and allowing a global black market in social identities to thrive on their platforms. [Dipayan Ghosh and Ben Scott / The Atlantic]
The historic success of “Black Panther” could change Hollywood forever. With an estimated $370.8 million worldwide debut — the biggest domestic opening weekend ever for a film released in February (or March, or April) — Marvel Studios’ first black superhero movie has demolished box office records and hopefully demonstrated once and for all that black stories can become global blockbusters. [Adam B. Vary / BuzzFeed News]
Top stories from Recode
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This is cool
Everybody gets a unicorn!