Key Takeaways:
- Individual U.S. retail investors are now able to participate in IPO allocations on Coinbase, beginning for Oura.
- Anyone will be able to buy shares via the Coinbase app at the IPO offer price prior to the public market’s opening.
- Securities offering to be handled by Coinbase Capital Markets, a FINRA broker dealer, with execution, clearing and custody provided by Apex Clearing.
Coinbase is moving even beyond crypto trading by providing an avenue for U.S. users to join IPOs before public trading commences. The move adds another traditional-market product to the exchange’s broader “Everything Exchange” strategy.
IPO Access Comes to the Coinbase App
Coinbase offers a separate tab of active IPO deals in the Coinbase app for eligible U.S. customers. Once they have funded their account, the users will be able to make a conditional offer to purchase an offering as soon as the anticipated giving range is available.
Once the order book is closed, Coinbase will fill in available shares. Depending on the amount supplied by the underwriters and overall customer demand, a request may be allocated 100% of its own or a partial allocation or not be allocated any shares.
Should shares be allocated then the allocation price is the final price of the IPO. The investors can also withdraw their applications and reapply during the opening period of the offering.
The first offering made possible by the new system is for Oura’s IPO, which will bring Coinbase into primary-market distribution of stocks for retail investors in the United States.
Read More: Coinbase Targets $24/5 Stock Perps in First U.S. Push for Single-Stock Crypto Futures
Early Selling Can Affect Future IPO Access
Coinbase will also implement measures that will weigh the favour of investors who own newly allocated shares for a longer period.
If customers decide to sell their IPO shares within the first 30 days they will be barred from the IPO offering for the next 60 days. Coinbase further indicates that frequent early selling may result in reducing the size of allocation or the frequency of the offerings.
Coinbase Builds Its Everything Exchange
The IPO product will be made available on Coinbase Capital Markets (CCM), which is a FINRA-registered broker-dealer. CCM is a customer order taker, bringing in customer orders and processing them through Apex Clearing Corporation as a best-efforts selling group member.
CCM does not endorse the offerings or have securities in inventory or an investing arm on the other side of customer transactions. Apex is responsible for execution, clearing and custody.
When additional selling groups are formed, Coinbase says additional IPO opportunities will become available as its broker-dealer gets allocations from them.
The expansion will add stocks to an existing platform that currently offers crypto trading and is developing products across multiple financial markets. With its new action, Coinbase inches closer toward the main market without commingling the securities and digital-asset services, while simultaneously enticing retail investors to participate in digital asset trading.
But for crypto investors, what matters isn’t so much the IPO as the way Coinbase is expanding the investable universe in a fintech app on its relatively nascent digital assets side.
Read More: Coinbase CEO Targets $70T US Stocks With Fully Backed Tokenized Equities Push
