When crypto platform Coinbase goes public on New York's Nasdaq on Wednesday, investors will be able to trade the stock simultaneously on the Frankfurt trading floor. An immediate inclusion makes this possible. On Xetra, the stock is expected to be available from Thursday.
14 April 2021. FRANKFURT (Börse Frankfurt). The IPO of Coinbase, a trading platform for cryptocurrencies (<ISIN US19260Q1076>) is making waves around the world. The fast-growing company says it now has 43 million customers worldwide and could increase its annual revenue nearly tenfold from 2020 to 2021. In the run-up to the IPO, the bitcoin price has risen to new record highs
The IPO is not a classic IPO, no new shares are offered to a broad investor base, but the existing owners place shares directly from their holdings, therefore called direct placement.
More cautious analysts expect a stock market value at the start of trading at 90 billion US dollars.
Start of trading may take longer
In terms of procedure, Nasdaq has reported the admission. Trading will probably start with the first price fixing on Wednesday from 3:30 p.m. German time.
The prerequisite is, of course, that the start of trading goes smoothly and that the price is determined in the USA. Incidentally, this can take considerably longer than here in Germany, as the New York Stock Exchange uses a different procedure to determine the price of an IPO. In the case of the Chinese internet company Alibaba in July 2015, it took over two hours to find the first price. Snap in 2017 and Uber in 2019 took around an hour. On the Frankfurt Stock Exchange, the first price in an IPO is usually determined after 15 minutes.
Immediately trading on the Frankfurt floor.
Regardless of how one assesses the potential returns of an investment in bitcoin shares and whether one believes in the growth story of cryptocurrencies and their trading platforms, one thing is definitely worth noting: local investors can trade the shares in Frankfurt immediately following the US trading launch.
Many foreign stocks on offer
Of the 10,500 companies whose shares are traded on the Frankfurt Stock Exchange, only just under 1,000 have their home market in Frankfurt; the rest are foreign stocks. The home market is the stock exchange where a company has its initial listing. As a rule, it is listed there and also complies with its transparency rules. Normally, the volume of a share traded is highest on the home market, which is where the reference price is set that is used as a basis for the other exchanges.
The other almost 10,000 stocks on the Frankfurt Stock Exchange have their initial listing on another stock exchange and have been included in Frankfurt trading by specialists. These shares are listed on the Quotation Board, which does not entail any further transparency obligations.
The spectrum of companies included is wide, ranging from U.S. blue chips such as Genral Motors to small Taiwanese technology stocks. If the original shares cannot be traded abroad, as is the case with Russian shares, for example, exchange bills, known as DRs for Depository Receipts, are often offered instead, representing a deposited share. A few companies have dual listings, such as Fiat.
14 April 2021, © Deutsche Börse AG