Coinbase is hiring a chief financial officer (CFO). This would be a significant move in the company's growth plans but also raises questions about whether the company plans to launch an initial public offering (IPO).
Coinbase
Coinbase is a US cryptocurrency exchange founded back in 2011 by Brian Armstrong and Fred Ehrsan. It has two core products. One is a Global Digital Asset Exchange (GDAX) that trades a variety of digital assets. Coinbase is reported to have had revenue of $1 billion in 2017. The company was valued at $1.6 billion last August.
Hiring a CFO is top priority for Coinbase
Often adding a CFO to a company is looked at as a sign that the company is contemplating an IPO. However, with Coinbase it may simply be that it needs a CFO to properly manage its complicated business model.
Coinbase is already in late-stage talks with several candidates. Tim Laehy a veteran CFO had already joined the company last October but just as an interim CFO. He is not expected to remain.
Coinbase has already hired vice presidents to deal with communications and corporate development. The two will help Coinbase manage its massive growth as interest in cryptocurrencies has soared.
Although Coinbase has refused to comment. Brian Armstrong the CEO said last year that it typically takes him 6 to 12 months to choose the right person.
Investors clamoring for shares
Investors have been pestering the company to allow them to buy shares even though Coinbase told them to desist. The company has been evaluated by investors seeking shares at from as low as $2 billion to as high as $8 billion showing that the market is volatile, unclear, and also not liquid.
Company ponders whether to launch a fund-raising secondary transaction
The company is considering whether to launch a new financing secondary transaction though the company is not wanting for money. The purpose would be mostly intended to allow existing investors who want to, to cash out although the transaction would also include a small primary element to raise money.
The pressure from investors might be alleviated through a sanctioned round of secondary trading. Such trading is not officially allowed. Investors in recent weeks have been negotiating with the company whether to sell or buy shares. This trading could weaken the pressure for an IPO and allow investors to have a piece of the action.
It remains to be seen if Coinbase will offer an IPO this year.
New CFO will have many problems to deal with
As reported in a recent Digital Journal article Coinbase has had many problems with Visa and the banks as customers have experienced duplicate charges, reversals, and extra fees. Visa has admitted it is at fault but Coinbase gave an incorrect explanation of what happened. The appended video discusses some issues. If Coinbase's problems are not solved it will lose customers to other exchanges.
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