#Coinbase files to become first listed major US #Bitcoin #Cryptocurrency exchange

Coinbase's public debut is likely to rank as one of this year's largest new tech listings © Getty Images

Coinbase generated $1.3bn in revenue last year, up from $534m the year prior, enabling the company to turn a profit of $322m in 2020 after losing $30m in 2019, according to a filing with US securities regulators.

From the FT:

Coinbase files to become first listed major US cryptocurrency exchange

Trading platform earns more than $300m in profits in 2020 on bitcoin surge

February 25, 2021 

The company's public debut, the first for a large US cryptocurrency exchange, is likely to rank as one of this year's largest new tech listings and would mark a milestone for backers of the emerging sector. Coinbase is aiming to list in late March, said one person familiar with the company's thinking.

…

Coinbase filed for a direct listing rather than a traditional initial public offering, meaning it will not raise additional capital when it goes public.

Brian Armstrong, chief executive of Coinbase, warned that prospective investors should expect volatility in the company's financials.

"We may earn a profit when revenues are high, and we may lose money when revenues are low, but our goal is to roughly operate the company at break even, smoothed out over time, for the time being," Armstrong wrote in a letter attached to the filing.

Almost all of Coinbase's revenue came from transaction fees last year, it said in the filing, underlining the company's dependence on cryptocurrency trading fees.

Shares in the company have recently changed hands in private markets at prices that would give it a roughly $100bn valuation, according to people briefed on the trades, up from $8bn less than three years ago.

Coinbase could use those trades, in addition to input from public investors and its financial advisers, to determine its opening price on public markets.

…

The company said institutional activity made up almost two-thirds of its total trading volume in the fourth quarter, when transaction revenues jumped more than 70 per cent from the previous quarter to $476m. It said it had 2.8m monthly transacting users in 2020, almost tripling from the year prior.

Coinbase said it oversaw about $90bn in total assets stored on the platform, representing more than 11 per cent of the total market for cryptocurrencies at the end of last year. It has also made venture capital investments in more than 100 companies.

…

Among the company's biggest investors, controlling more than 5 per cent of stock each, are Andreessen Horowitz, Paradigm, Ribbit Capital, Tiger Global Management, and Union Square Ventures.

See the whole article on the FT here:  https://www.ft.com/content/536db489-d607-411f-ae71-8ef072b2d4bb?

#SoftBank's plans for second mega #VisionFund hit by #WeWork, #Uber debacles

SoftBank's cash flow problems compound plans for second mega-fund hit by WeWork, Uber debacles

(Reuters) - SoftBank Group founder and CEO Masayoshi Son is struggling to raise money for a second massive technology investment fund in the wake of the failed public offering of office-rental company WeWork and sliding valuations of other major investments, according to two people familiar with the situation.

Son is still determined to go ahead with Vision Fund 2 even though some lieutenants have urged a delay... 

The worsening turmoil at WeWork will continue to be a strain on SoftBank and the first [Vision] fund. 

The price of WeWork bonds has sunk...without further investment from Son or his entities, it will be difficult to stabilize given the size of its future financial commitments.

That is just one of the calls on SoftBank's money. Some of the investors in the first Vision Fund receive interest payments of 7% annually on their stakes, an unusual structure that creates an ongoing need for cash. Some of that has come from sale of stakes...but SoftBank has also borrowed money to fund payouts to investors.

SoftBank also faces the risk that a deal to merge its money-losing U.S. telecom carrier Sprint Corp with T-Mobile US Inc could be blocked by an antitrust lawsuit from U.S. states. If that happens, it will leave SoftBank with an expensive liability, analysts say.

SoftBank's stock has fallen 13% over the past month and is now trading at its lowest level since January. SoftBank's operating cash flow also turned negative last quarter and it could struggle to raise tens of billions of dollars in cash, a Reuters analysis of its balance sheet shows.

SoftBank does not have significant cash on hand to finance the new fund. As of June 30, it had $27.41 billion of cash and cash equivalents on its balance sheet. However, this and other current assets was more than matched by near-term liabilities.

Read the whole article online here: https://premium.kitco.com/news/2019-10-04/SoftBank-s-plans-for-second-mega-fund-hit-by-WeWork-debacle.html

______________________________

MasterFeeds

@MasterFeed

#WeWork: At What Point Does #Malfeasance Become #Fraud? Neumann fired? My God, he got on the last helicopter out of Saigon…

Great interview with @ProfessorGalloway in the New Yorker on #WeWork's « triage » 

« This is a distressed asset in free fall that is inarguably worth less than zero. Because all we have here is an entity burning $700 million a quarter. »

« The market is going to have to decide how thin the lines are between vision, bullshit, and fraud. »

« Adam Neumann fired? He was liberated. This guy just played this perfectly. Could you imagine what his life would be like right now? If he was still CEO? Showing up every day to an office where he had sold $750 million and everybody else was trying to figure out how they were going to pay the rent on the new apartment they had moved into because they thought they had $7 million in We stock? »

« Adam Neumann came in, smoked his own supply, and walked out with three-quarters of a billion dollars about the time that people in hazmat suits showed up. …So he and his family will literally have to go into hiding. There will be threats against his life. There's going to be so much anger here.»

What about « JPMorgan and Goldman Sachs? These guys were about to collect $130 million in fees and then prop up some equity analysts to tell their private-wealth managers in the marketplace that this thing was $40 billion to $60 billion. And according to Goldman, it was worth $60 billion to $90 billion! What does that say about them? »

« What happens to the New York and Chicago commercial-real-estate markets where WeWork was the biggest and the second-biggest tenants? »

« The real toll is that there's somewhere between 5,000 and 15,000 WeWork employees who took a job and a big part of their compensation — the reason they took these jobs was because of equity value. And it's impossible not to count your money 30 days out from an IPO…

« We're probably talking about several thousand people who were going to be millionaires. Now most of them are probably thinking that in the next 30 days there's a one-in-two chance I don't have health insurance. »

« Adam Neumann fired? My God, he got on the last helicopter out of Saigon. »

Read the whole article in the New Yorker Magazine: 

'At What Point Does Malfeasance Become Fraud?': NYU Biz-School Professor Scott Galloway on WeWork

James D. WalshOct. 1, 2019

http://nymag.com/intelligencer/amp/2019/10/marketing-expert-scott-galloway-on-wework-and-adam-neumann.html?__twitter_impression=true

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-- The MasterFeeds

AgBank’s Odd Cornerstone Investors

AgBank’s Odd Cornerstone Investors

If you thought the cornerstone investors for the Hong Kong leg of Agricultural Bank of China’s initial public offering were a motley crew, take a look at the cast for the Shanghai IPO (PDF, in Chinese).

Accounting for a whopping 40% of the mainland issue (assuming the greenshoe option is exercised), the 27 investors come from all corners of China’s economy and — with the exception of the occasional financial investor — it’s not immediately obvious why they might feel their business will be enhanced by taking a piece of AgBank.

Firms with some involvement in China’s agricultural sector, such as Cofco Ltd., China’s main grain producer, and China Tobacco Corp., may have a strategic reason for investing. Similarly, if AgBank is poised to taking a leading role in the urbanization of China’s hinterland, as it has been telling investors, then there may be some synergy for State Grid Corp. of China, the monopoly power distributor in all but five southern provinces, and China State Construction Engineering Corp.

But it’s more difficult to divine the strategic thinking that went into, say, Aviation Industry Corp. of China or China State Shipbuilding Corp. stumping up cash for a piece of AgBank. Ditto for China Aerospace Science & Industry Corp., China National Nuclear Corp. and Dongfeng Motor Corp.


Cornerstone investors became popular a few years back when Chinese companies started listing on the Hong Kong stock exchange. Little was known about many of the Chinese firms choosing Hong Kong for their IPO and foreign investors were wary of stumping up cash. One way to calm jitters was by taking on cornerstone investors, well-respected entities that would agree to take a percentage of the offer prior to the price being set, and to hold onto that stake for a pre-arranged period of time. That vote of confidence in the stock would then hopefully encourage other investors to buy in.

But in some cases, rather than stimulating interest, the involvement of cornerstone investors seems more an exercise in shoring up enough funds in advance so the issuer doesn’t have to rely on the market.

That seems to be the case with AgBank, which choose to push ahead with its IPO despite markets globally having been in the doldrums. Rather than savvy investors like sovereign wealth funds or well respected entrepreneurs — which make an appearance on the Hong Kong roster of AgBank’s cornerstone investors — the mainland leg is dominated by companies that, like AgBank, are owned by the Chinese government.

In an amazing mobilization of state resources, those investors were willing to pay a combined $4.8 billion for a piece of AgBank. They ended up paying around $4.1 billion after the price came in below the upper limit of the indicative price range.


So far AgBank has raised $19.23 billion in a dual listing in Hong Kong and Shanghai, still a way behind Industrial & Commercial Bank of China Ltd’s IPO in 2006 which raised $21.9 billion making it the biggest ever.


ICBC also made heavy use of cornerstone investors, signing up 23 firms for its A-share listing, many of which such as Cofco, the investment arm of mining group China Minmetals Corp, and China Life Insurance Co. have also turned out for AgBank. Similarly, the funds raised from them also accounted for about 40% of the Shanghai leg of ICBC’s IPO.

– Dinny McMahon, with contributions from Rose Yu

AgBank’s Odd Cornerstone Investors - China Real Time Report - WSJ

-- The MasterFeeds