Coinbase Denies Executives Engaged In Stock Dumping
Crypto Briefing | Apr 30, 2021 12:20AM ET
Coinbase (NASDAQ:COIN) says that its exectuives sold far less stock than some have suggested. In response to widespread allegations from the crypto community, Coinbase has denied that its executives sold large amounts of their stock holdings following the company’s listing on Apr. 16. “Over the weekend of Apr. 17-18, 2021, we saw numerous pieces of misinformation spread about our investor and executive stock sales,” Coinbase wrote. “We’d like to set the record straight.”
It noted that investors and executives must file a Form 4 when they sell shares on a listing day. It noted that these filings are publicly available but are “tricky to correctly interpret,” which led crypto investor Dereck Coatney to create an “erroneous chart.”
That chart was noticed and retweeted by more prominent investors, such as Peter Schiff of ShiffGold and Euro Pacific Bank. In his analysis, Schiff wrote that Coinbase CEO Brian Armstrong privately dumped of his 71% shares, while various other executives dumped 63%, 86%, 97%, and 100% of their holdings.
h2 The Actual Numbers/h2Coinbase says that these numbers are incorrect. It says that Armstrong actually sold 2%, not 71%, of his outstanding equity. Other executives sold 15%, 24%, 8%, and 38% of their holdings.
Those numbers are similar to corrections published by The Block’s Frank Chaparro shortly after the information began to circulate.
However, the numbers are still higher than other early corrections. Coinshares CSO Meltem Demirors, for example, suggested that each executive sold less than 10% of their shares.
Coinbase added that its executives’ actions were consistent with behavior seen at other companies. It says that its section 16 officers sold 3.32% of their holdings after a direct listing. By comparison, Asana execs sold 1.67%, of holdings, Palantir execs sold 7.29%, Roblox execs sold 4.21%, and Slack execs sold 4.18%.
h2 Why Was There Confusion?/h2
Get The News You Want
Coinbase speculated that confusion arose from different types of equity, which are accounted for differently. It added that executives may appear to have sold 100% of their shares, when in fact they only sold 100% of the shares exercised during a same day sale.
Coinbase also clarified that, because it carried out a direct listing rather than a traditonal IPO, it only sold existing shares. That means its executives actions’ did not dilute the market.
Despite the company’s reassurances, Coinbase’s stock has fallen in value from $342 on Apr. 16 to $294 today—representing a 14% loss over just a few weeks.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.