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While there’s been a lot of noise around the pump and dump by Coinbase insiders and executives, it turns out they sold only a minority stake of their total liquidity holdings in the company.
Last week, April 14, crypto exchange Coinbase Global Inc (NASDAQ: COIN) went ahead with its public listing making it the first crypto firm to make it to Wall Street. However, as it turns out, Coinbase insiders and investors sold around $5 billion worth of their holdings of COIN stock on the first day.
COIN Stock Holdings
This came out as the company makes a series of filings with the US SEC last Friday. The filing also mentions that Coinbase CEO Brian Armstrong himself sold 749,999 shares in three different batches in the price range between $381 to $410. Thus, the CEO netted total proceeds of $291.4 million. While Coinbase hasn’t spoken anything about it, it seems that Armstrong liquidated 1.5% of his total holdings.
The filings also note that multiple executives sold a high percentage of their stake in Coinbase. Another filing shows Coinbase director Fredrick Wilson sold 4.70 million shares worth a massive $1.82 billion. It’s yet not clear as to how many more shares of the company does Wilson holds. But he reportedly holds nearly 10% of the entire Coinbase share which is currently worth a massive $63.6 billion.
Another major transaction is from Coinbase CFO Alesia Hass. As per the filing, Alessia sold around 255,500 shares at a price of $388.73. CoinShares CEO Meltem Delmers finds it nothing surprising. “This is making the rounds and is so misleading – details matter! each of these execs have tons of unvested options that account for the majority of their holdings – in reality they’ve each sold less than 10% of their total shares,” added she.
Many on social media started saying that it was a classic example of a pump and dump scheme. However, the percentage of equity shares that these executives have is massive. Also, the quantity they sold is a very fraction of the huge thing.
ARK Investment Buys COIN in Massive Quantity
As it turns out popular hedge fund Ark Investment purchased COIN shares in massive quantity. On the listing day itself, Ark Investment purchased $246 million worth of COIN shares. On the second day, the company again purchased $100 million worth of COIN shares and added another $64 million worth of COIN shares on Day 3.
Ark Investment made this purchase by partly liquidating its holdings in Tesla Inc (NASDAQ: TSLA). Ark Investment purchased the COIN shares across its three funds – the premier ARK Innovation ETF (ARKK), ARK Fintech Innovation ETF (ARKF), and Ark Next Generation Internet ETF (ARKW).