Kraken
- Kraken CEO Jesse Powell said he is considering an IPO when his company goes public instead of a direct listing, Fortune reported.
- Powell’s thinking was influenced by Coinbase’s volatile direct listing in April.
- The CEO ruled out going public via SPAC, saying his company is “too big” for it already.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Kraken founder and CEO Jesse Powell said he is considering a traditional initial public offering to take the cryptocurrency exchange public instead of a direct listing following Coinbase’s volatile performance.
“An IPO is looking a little more attractive in light of the direct listing’s performance,” Powell told Fortune. “I would say we’re looking at it more seriously now having the benefit of seeing how the direct public offering played out for Coinbase.”
Coinbase, the largest cryptocurrency exchange in the US, went public on April 14 in what many viewed as a milestone from the digital asset ecosystem. The company was valued at $68 billion ahead of its direct listing but now hovers around a market cap of $58 billion.
Powell pinned the volatility of Coinbase’s performance to the method it used to go public, especially since existing shareholders are not prohibited from selling their shares at the debut in direct listings.
Unlike in an IPO, companies that go public via direct listing do not issue new shares.
Following a record for Kraken’s bitcoin trading volume in the first quarter of 2021, Powell had floated the idea of following Coinbase’s direct listing route.
The Kraken boss told Fortune that he is still optimistic his company can go public next year.
“Hopefully we’ll have more analyst coverage out, and there’s just more of a track record of growth for the industry that people feel like they can rely on,” he said.
While mulling over how best to take Kraken public, Powell said that a merger with a blank-check company was not an option.
“It might have been possible a few years ago, but today, I think we’re too big to consider doing a SPAC,” he said.