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Coinbase insiders dump nearly $5 billion COIN stock on opening day
Crypto News

Coinbase insiders dump nearly $5 billion COIN stock on opening day

Saudu Clement
Saudu Clement

Coinbase CEO Brian Armstrong and several other early investors have cashed out big from the recent COIN listing on Nasdaq. The CEO and other insiders dumped COIN shares worth roughly $5 billion shortly after the stock was listed.

The stock had a fairly good performance after its direct listing on Nasdaq. It settled at over 30% from its initial reference price of $250. As of press time, the asset was selling at the price of $331. However, insiders had already cashed out, with at least one C-suite director cashing out his entire stake in the cryptocurrency exchange.

According to information that is publicly available on the US SEC website, CEO Armstrong sold about $291.8 million in share. He sold 749,999 shares in three separate sessions when COIN traded between $381 and $410. This figure represents a meager 1.5% of his stake in the company.

Coinbase director Fred Wilson also sold a whopping 4.7 million shares for a total of $1.8 billion. Meanwhile, director Marc Andreessen sold 1.18 million shares along with Andreessen Horowitz and two related parties.

In total, 12,965,079 shares valued at over $4.6 billion were sold by insiders, according to data from Capital Market Laboratories. The data did not indicate whether directors or any other insider purchased additional shares. So far, the general assumption is that the insiders are dumping the asset.

Pump and Dump?

Speaking of dumping, the development was met with jeering and amusement on social media. Many observers likened the move to a classic “pump and dump.”

While many people view the move as a negative development, some say it is not as bad as it seems. Their theory is that selling the shares is a way to increase liquidity. Furthermore, several major buyers are still holding the asset. For instance, hedge fund manager Cathie Wood is positive on the future of the asset, having purchased more than $350 million worth of shares for three different ARK ETFs. After an initial purchase of $246 million worth of shares on opening day, the ARK investment group bought an additional $68 million COIN shares.

One cannot also ignore the fact that 1,700 Coinbase staff were recently gifted 100 shares each as a “thank you” from the exchange.