When trading in cryptocurrency exchange Coinbase’s shares goes live tomorrow beneath the ticker COIN, market makers are getting to need a gauge for where they ought to start trading.
That gauge is understood as the “reference price” and therefore the one for COIN will be released at the close of the United States equities market today by the equity exchange Nasdaq. The worth is generally found by Nasdaq consulting with the corporate’s financial advisers (in this case Goldman Sachs) and is usually the worth that the company last traded on private markets [$343.58 USD per share in Coinbase’s case].
The reference price will affect what proportion of money the 114,800 Class A shares that the corporate is selling to new investors within the offering will increase the company’s treasury, added James Friedman, the senior fintech research analyst at Susquehanna International Group.
Should COIN trade below the reference price during the primary few days of trading it might likely be considered a black eye for the exchange from a PR perspective, but Friedman outlined most equity analysts will have their eyes on Coinbase’s long game.
“There are tons more to the creation of public equity than its first day of trading,” Friedman revealed. “Square stock went right down to $8 USD shortly after trading because they lost the Starbucks account … now they’re above $200 USD.”