Coinbase announces proposed direct listing • Hacker News Board

Re: Coinbase announces proposed direct listing

#211

Post by [deleted] » Fri, Jan 29, 2021, 4:44 PM UTC

bluedevil2k wrote: post #210

harryh wrote: post #202

Earlier quoted context omitted.

If you are willing to by 100 shares at $100 or, say, 200 shares at $50 you can enter the following two bids: 100 shares at $100 100 shares at $50 This will satisfy your demand curve. In a direct listing, the initially listed shares will all transact at the same price (the clearing price).

That’s a contrived example though. Say you put 200 shares at $50. If the clearing price is $50, you’ve won 300 shares at $50 - $15,000 total. What if you only have $10,000? I’m saying it’s difficult to a) allow bidders to enter a demand curve b) respect their budget limitations c) keep it easily understandable for bidders.

[deleted]

Re: Coinbase announces proposed direct listing

#212

Post by harryh » Fri, Jan 29, 2021, 5:05 PM UTC

bluedevil2k wrote: post #210

harryh wrote: post #202

Earlier quoted context omitted.

If you are willing to by 100 shares at $100 or, say, 200 shares at $50 you can enter the following two bids: 100 shares at $100 100 shares at $50 This will satisfy your demand curve. In a direct listing, the initially listed shares will all transact at the same price (the clearing price).

That’s a contrived example though. Say you put 200 shares at $50. If the clearing price is $50, you’ve won 300 shares at $50 - $15,000 total. What if you only have $10,000? I’m saying it’s difficult to a) allow bidders to enter a demand curve b) respect their budget limitations c) keep it easily understandable for bidders.

Why would you put 200 shares at $50 and 100 shares at $100 if you only had a $10,000 budget? That's misrepresenting your actual demand curve.

Are you saying that an auction of this kind is a bit complicated, and it's possible to make a mistake? I suppose that might be true, but that is a very different assertion from your original position:

"since people had to enter a single point on their demand curve as a price and quantity of shares (instead of their entire demand curve)"

Re: Coinbase announces proposed direct listing

#213

Post by boring_twenties » Fri, Jan 29, 2021, 5:08 PM UTC

dannyw wrote: post #162

boring_twenties wrote: post #137

Earlier quoted context omitted.

Uniswap can only trade ERC-20 tokens, though.

The tokenisation of everything will happen; much like securitisation. You already have WBTC (wrapped Bitcoin).

Not everything. A wrapped Monero wouldn't make much sense.

Re: Coinbase announces proposed direct listing

#214

Post by cbhl » Fri, Jan 29, 2021, 8:45 PM UTC

harryh wrote: post #199

cbhl wrote: post #188

Earlier quoted context omitted.

If the person has only 18000 though (300 at 60) then if they put in 100 at $100, they'll only be able to buy 133 at 60. I would still enter two bids; it's just a matter of adjusting how many at each level.

No, this is not how it works. All the shares in the auction are sold at the same price. If the market clears at 60, a person entering the bids I described would buy 300 shares at 60.

I apologize if I misunderstood. Isn't this a direct listing? At what point do retail investors get to participate in an auction?

Re: Coinbase announces proposed direct listing

#215

Post by harryh » Fri, Jan 29, 2021, 9:30 PM UTC

cbhl wrote: post #214

harryh wrote: post #199

Earlier quoted context omitted.

No, this is not how it works. All the shares in the auction are sold at the same price. If the market clears at 60, a person entering the bids I described would buy 300 shares at 60.

I apologize if I misunderstood. Isn't this a direct listing? At what point do retail investors get to participate in an auction?

Retail investors (and any other investors) submit orders before the new security begins to trade. The first thing that happens on open is an auction.

Re: Coinbase announces proposed direct listing

#216

Post by lostmsu » Fri, Jan 29, 2021, 11:21 PM UTC

devops000 wrote: post #198

kinghajj wrote: post #48

Earlier quoted context omitted.

My god, that would be amazing. 1. Coinbase raises money from the IPO. 2. Coinbase takes some of that money and gives it to Grayscale. 3. Grayscale uses the money to buy cryptocurrency... On Coinbase! Not only do Coinbase shares appreciate from the increased value of assets on their balance sheet, but they earn some of their money back from fees, too. Just make sure that steps #1 and #2 have some delay, after any lock…

We invented BTC for not having a central bank, now the Central Bank could be Coinbase.

But it is not central in any way.

Re: Coinbase announces proposed direct listing

#217

Post by inadequatespace » Sat, Jan 30, 2021, 6:25 PM UTC

svachalek wrote: post #126

throwaway803453 wrote: post #92

Earlier quoted context omitted.

From EquitZen's knowledge center: "Shares that are the subject of investment through EquityZen are generally subject to a lock-up period of up to 180 days after the effectiveness of a company's IPO filing, during which time shareholders are restricted from selling their shares."[1] The 180day lock-up period could EquityZen poorly suited for investors with a short time horizon.

In this case though, Coinbase is doing a direct listing, not an IPO. I think there is usually no lockup associated with a direct listing.

Er, PLTR still had a lockup for its direct listing. If this trend continues the “usually” aspect will not hold.

Re: Coinbase announces proposed direct listing

#218

Post by inadequatespace » Sat, Jan 30, 2021, 6:27 PM UTC

lmm wrote: post #166

throwaway803453 wrote: post #157

Earlier quoted context omitted.

For a direct listing, does that mean Coinbase could conceivably charge any price they want for a market order given they are the only seller when it is first listed ?

Other existing shareholders can sell as well (there's no lockup), and I guess short sellers could sell immediately? But yeah issuing a market on open order for a new stock would be a "courageous" move (but IMO that's true of any market order - don't use a market order instead of a limit order unless you're genuinely willing to buy at $999 / sell at $0.01).

Could be a lockup still. There was for palantir.

Re: Coinbase announces proposed direct listing

#219

Post by itisit » Sat, Jan 30, 2021, 10:50 PM UTC

reverend_gonzo wrote: post #150

mancerayder wrote: post #108

The AirBNB listing showed that banks favor their friends and clients in an IPO, when the price surged well before the debut allowed us Little People to buy. A direct listing would be cool and I hope they pursue that.

That’s the standard. However, Airbnb allocated a number of shares to its own hosts, and a lot of Little People were able to partake in that if they were on the ball.

Meh. 7% allocation. Like most charitable efforts by companies, optics first, generosity much further down the list.

Re: Coinbase announces proposed direct listing

#220

Post by lmm » Sun, Jan 31, 2021, 7:32 AM UTC

bluedevil2k wrote: post #201

lmm wrote: post #167

Earlier quoted context omitted.

You can issue your whole curve as orders, can't you? Something like: buy 50 shares limit $200 on open, buy 50 shares limit $100 on open, buy 100 shares limit $50 on open.

There’s only buy orders in these auctions: buy X shares at Y price.

The limit is the price. With the "at open" I was thinking about direct listings where you'd need some way to prevent your order being filled after the opening auction (and potentially at a different price), but with an IPO that's not an issue at all. So you should definitely be able to just put your whole curve in.