🙌 The deets on direct listings, from Coinbase’s chief legal officer

Coinbase went public last week in one of the most hyped stock market debuts in history. Like many new companies, it chose to bypass the traditional IPO route and go public through a direct listing. 

In the wake of its debut, Coinbase’s chief legal officer, Paul Grewal, offered a few helpful pointers and clarifications about direct listings on Twitter. We’re summarizing and sharing them here: 

  • No new shares were created for Coinbase: In IPOs, new shares get issued for traders to buy. In direct listings, existing shares get bought and sold. 

  • The biggest sellers for Coinbase were investors and execs: “Without their sales,” Grewal wrote,” (Coinbase) could not have successfully created a supply of shares that could enable new investors to come in, which is basically the point of a (direct listing).” 

  • Plenty of news stories discussed the quantity of shares sold by the execs: CEO Brian Armstrong sold about $292 million worth. Grewal noted that the executive sales were pretty standard for any direct listing.  

Coinbase’s stock has so far been fairly volatile since the direct listing, but it still trading well above 300.