Coinbase co-founder and CEO Brian Armstrong owns about 39.6 million shares of the company going into its direct listing. According to the latest prospectus filed with the Securities and Exchange Commission, the average private market share price is $343.58, which values Armstrong’s stake in Coinbase at $13.6 billion.
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Armstrong holds sizable stake in Coinbase
When Coinbase holds its direct listing to go public in the next few weeks, Armstrong is expected to become one of tech’s richest people, according to CNBC. He co-founded the cryptocurrency exchange in 2012 after working at Airbnb for a year. Armstrong now owns nearly 40 million Class A and Class B shares of the company.
Most tech founders face a lockup period during which they can’t sell shares of their company right after it goes public. However, Coinbase’s direct listing does not include a lockup period on its shares. Direct listings differ from initial public offerings because the firm doesn’t raise new capital but rather allows existing shareholders to sell shares on the open market.
The next decabillionaire
If Coinbase’s private trading indicates where the stock will open on the public market, its CEO will become one of a growing group of tech “decabillionaires.” Amazon CEO Jeff Bezos, Tesla CEO Elon Musk, Microsoft co-founder Bill Gates and Facebook CEO Mark Zuckerberg lead the list of decabillionaires, each of them worth more than $100 billion. Soaring tech valuations and new IPOs have ballooned the list of Big Tech’s mega-rich over the last few years.
According to CNBC, much of the appreciation in Armstrong’s wealth has come over the last year as the value of Coinbase shares on the private market soared more than 10-fold. The cryptocurrency exchange collects most of its revenue from storing and trading bitcoin, which has skyrocketed by more than 700% over the last year. Coinbase also sees substantial revenue from storing and trading Ethereum, which has climbed more than 1,000%.
Controversy at Coinbase over Armstrong
CNBC noted that Armstrong has been at the center of controversy in recent months. He told workers in a blog post in September that Coinbase would not focus on activism during a time of high tensions caused by the pandemic, racial protests and a heated presidential election. He said that although he believed those efforts were “well intentioned,” they could destroy a lot of value by being a distraction and creating internal division.