Coinbase is taking innovative new steps toward educating retail shareholders ahead of its forthcoming direct listing, which could value the company at more than $100 bn.
The cryptocurrency exchange announced today that it would be hosting a Reddit Ask US Anything (AUA) until the end of this week. AUAs and Ask Me Anythings (AMAs) are popular written Q&As held on Reddit. Typically, interviewees answer the questions that receive the most upvotes from other Reddit users – an approach Coinbase is honoring, with some exceptions.
IR Magazine has talked to public companies that have considered hosting AMAs in the past but have pulled out because of concerns about legal risk or encountering the unfiltered – and sometimes unsavory – side of Reddit. These concerns were exacerbated after WallStreetBets came to prominence earlier this year.
Traditionally with AMAs, the interviewee responds to user questions in real time on Reddit itself. According to Coinbase’s post announcing the event on Reddit, the company is not allowed to respond in real time, based on SEC rules. Instead, the company’s executive team – including founder and CEO Brian Armstrong and CFO Alesia Haas – will record video responses that will be posted to Reddit and Coinbase’s IR website. The AUA runs from today until March 19 at 7.00 pm PDT.
In its post on Reddit, Coinbase also explains that it can’t answer questions that relate to the following topics:
- ‘Questions around Coinbase’s valuation, anticipated stock price or non-public financials’
- ‘Questions that are inappropriate or irrelevant (this would include any [not safe for work] language, comments that are offensive or hateful, or questions about specific Coinbase accounts)’
- ‘Speculation on future financial performance, growth trends or expansion plans’
- ‘Questions around new asset listings or explorations’
- ‘Questions that are irrelevant to the public listing process or immaterial to investment decisions.’
Coinbase confidentially filed its draft S1 with the SEC on December 17, 2020, and has posted a series of updates since, including today. As part of its direct listing process, Coinbase is spending time educating its institutional investors, according to a post on its corporate website.
‘This is the standard process for all companies going through a public listing, but it leaves out a sizable audience: everyday investors,’ the post continues. ‘We want a process where all investors, regardless of affiliation or size, have equal access to information and have the opportunity to engage with us.’
As of 3.00 pm PDT, Coinbase’s post on Reddit has received more than 200 upvotes and 600 comments across three different sub-Reddits.
Educational video interviews
In addition to the Reddit AUA, Coinbase has posted four videos to its IR website that are intended to help individual investors better understand the company. These videos include discussions of Coinbase as a company, an outline of its perceived competitive advance, its business model and a description of its products and customers. The videos are between four and eight minutes long.
‘As we progress toward our proposed public listing, our goal is to make information about our business available in a way that’s equitable for everyone — from the largest Wall Street institution to the everyday investor,’ the company writes in its blog post.
These video explainers closely mirror the experience many Coinbase users have had. On the Coinbase app, users are given the opportunity to watch short educational videos about different forms of cryptocurrency in exchange for small amounts of that cryptocurrency.
Coinbase declined to comment for this article. The company has not yet publicly communicated a date for its direct listing on Nasdaq.