Last week, we discussed how Westpac Banking Corp (ASX: WBC) was set to enjoy an upcoming windfall. The source of this windfall? An investment the Westpac-backed venture capital fund Reinventure made in a US company by the name of Coinbase.
Coinbase provides an exchange for investors to buy and sell cryptocurrencies, where users can trade popular cryptocurrencies like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Ripple (CRYPTO: XRP)
Reinventure made a $50 million investment in Coinbase back in 2015. That investment could now be worth much more tomorrow. Coinbase is about to list over in the US on the Nasdaq exchange (ticker to be NASDAQ: COIN). And we've just found out its listing price.
Coinbase set to debut tonight
According to an article from Nasdaq.com, Coinbase will list at a price of US$250 per share. That share price would value Coinbase at almost US$50 billion. As the Nasdaq notes, that price is "not an offering price for investors to purchase shares, but rather a benchmark for performance when the stock starts trading". And there's a fair bit of evidence to suggest it will rise above that benchmark.
Firstly, Coinbase is in an area (cryptocurrencies) that garners a lot of attention from retail investors these days. We have seen how a hyped up and enthusiastic retail base of shareholders can drive a newly listed tech company to massive initial gains on listing. Just look at the Snowflake Inc (NYSE: SNOW) last year. Or the recent ASX listing of Airtasker Ltd (ASX: ART). As such, we can reasonably expect to see a generous level of interest for Coinbase when it lists.
Further, the Nasdaq report notes that Coinbase shares were trading with a US$343.58 volume-weighted average price per share on private markets in the first quarter of this year.
All of this also comes as the price of cryptocurrencies like Bitcoin hit all-time highs – which is perhaps a fortuitous coincidence for Coinbase at this time. Or, as my Fool colleague Bernd Struben noted the other day, perhaps this is a chicken-and-egg scenario where interest in the Coinbase listing is actually feeding into the Bitcoin price.
Either way, this is shaping up to be quite the blockbuster share market event. For both Coinbase and Bitcoin. Of course, we ASX investors will need to stay up late tonight to see how it all unfolds (the US markets will open trading at 11:30 pm AEST). See you then, perhaps.
