Four top
Global Inc. officials have collectively pocketed more than $1 billion by selling shares since the cryptocurrency exchange’s public listing last spring, a period in which the company’s shares have declined some 80%.
Co-founders
Brian Armstrong
and
Fred Ehrsam,
as well as President and Chief Operating Officer
Emilie Choi
and Chief Product Officer
Surojit Chatterjee,
together netted about $1.2 billion in proceeds from stock sales starting the day the San Francisco-based company started trading through February of this year, according to a Wall Street Journal analysis of regulatory filings.
They sold the shares at prices ranging from $189 to $422. Coinbase opened at $381 on April 14, 2021, its first day of trading. On Friday, the stock closed at $75.32.
Cryptocurrencies have fallen dramatically this year as investors dump risky assets, worried about rising interest rates and surging inflation. Coinbase investors have suffered even more. Bitcoin was down 25% in May through Friday’s 5 p.m. ET level, while Coinbase has fallen around 33% this month.
Some analysts said investors expect executives—particularly founders—to sell stock in or after an initial public offering after having their stakes locked up for so long.
“These Coinbase executives maintain large positions in the company, reflecting their commitment to our long-term opportunities,” a Coinbase spokesman said.
Mr. Armstrong and his living trust sold shares for total proceeds of $292 million, according to the Journal’s analysis of regulatory filings. He still holds a controlling stake in the company, with 59.5% of voting power, according to an April regulatory filing.
Ms. Choi exercised options at a cost of $9.7 million and sold shares for total proceeds of $226 million, while Mr. Chatterjee exercised options at a cost of $6 million and sold shares for total proceeds of $110 million.
Surojit Chatterjee, Coinbase’s chief product officer, exercised options at a cost of $6 million and sold shares for total proceeds of $110 million.
Photo:
Samyukta Lakshmi/Bloomberg News
Mr. Ehrsam pocketed nearly half a billion dollars in stock sales during the period. Earlier this month, as the stock sank to lows, Mr. Ehrsam bought $75 million worth of shares on behalf of the cryptocurrency investment firm he co-founded, Paradigm One L.P. A regulatory filing on Thursday showed he bought an additional $1.8 million worth of stock earlier this week on behalf of Paradigm One.
A big chunk of the share sales happened the first day of trading, as all four sold stock in Coinbase’s direct listing. In a direct listing, early investors typically sell portions of their total holdings to enable outsiders to buy into the company on the opening day of trading. Such sales are critical for direct listings to go smoothly, as the company typically doesn’t sell any shares, in contrast to an initial public offering.
Write to Corrie Driebusch at corrie.driebusch@dowjones.com and Tom McGinty at Tom.McGinty@wsj.com
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Appeared in the May 28, 2022, print edition as ‘Coinbase Executives Pocket $1.2 Billion.’