Brian Armstrong announced on Twitter about a year ago that he planned to sell 2% his Coinbase shares to fund new ventures.
“I’m sharing this as I want you to hear it from me first,” The CEO and co-founder of the Exchange said.
This is exactly what Armstrong did. Armstrong sold 790,000. This is 2% ownership of Coinbase, as disclosed in Coinbase’s prospectus before its April 2021 direct listing.
OpenInsider data, collected by Blockworks and using filings of the Securities and Exchange Commission as a reference, shows that Armstrong earned nearly $53.2million during this time period.
Coinbase stocks trade around $164, and a 2% share would now be worth $129.5 Million. Armstrong left a whopping $76,000,000 on the table when he sold too early.
Armstrong wanted the money to go into companies that are at the cutting-edge of different industries. NewLimit is a company Armstrong founded with three other people to reprogram cells in order to prolong human life.
Armstrong co-founded ResearchHub along with Patrick Joyce, a former medical student. The company aims to revamp the reward systems for academic publishing and scientific research by combining crypto-crowdfunding with open source principles.
NewLimit also raised $40 million last year — about eight months after Armstrong’s pledge — in a Series A with participation from Peter Thiel’s Founder’s Fund, Dimension and Kleiner Perkins.
ResearchHub raised its own $5 million a month later, from investors such as Replit CEO Amjad Masad. Bob Young is the founder of Red Hat and open-source software pioneer Red Hat.
Armstrong continues to sell Coinbase shares even after reaching the 2% level. Armstrong has sold nearly another full percentage point of shares in the last few months, or 316 150 since November.
This chart shows the insider trading disclosed by Coinbase to the SEC from the day following Coinbase’s direct listing.
- The squares are sales by insiders, other than Armstrong.
- Circles point to COIN purchases by Shopify CEO Tobias Lütke and Paradigm, the fund started by Coinbase co-founder Fred Ehrsam.
- Armstrong sold exactly those properties marked with green plus.
Armstrong took a whole year to reach 2%, but he has now sold nearly half of that in just three months. He earned $44.6million in that period, or $141 per share.
Blockworks contacted Coinbase for confirmation that Armstrong did indeed reduce his stake more than 2%.
Unreported information in Coinbase’s quarter report from November last year was cited by a spokesperson.
The disclosure states that Armstrong had entered into a trading plan designed to sell up to 1.8 million shares in one year starting November 2023 — the same month Armstrong fulfilled his 2% pledge.
Napkin mathematics puts that 1.8M shares at almost 5% of Armstrong’s remaining stake when the information was disclosed, worth currently around $295M. Coinbase is currently valued at just over $40 billion.
Also included were provisions for plans of trading for Coinbase’s other executives. Paul Grewal is the Chief Legal Officer, Emilie Zhao, Director Fred Ehrsam and chief operating officers Emilie Chui are in line together to sell 3,000,000 shares, worth up to $489 million, this year.
Coinbase’s direct listing differs in the fact that it does not create new shares. Armstrong, for example, contributes to liquidity in the first day of trading by directly selling his own shares.
Coinbase’s first day of trading saw executives, directors and major investors sell $5 billion worth of stock. The stock of Coinbase plummeted almost instantly, starting at $381 and losing 40 percent in the next two months.
COIN has seen a strong recovery since then. Its price is now above $32, despite the fact that it fell below $30 in January.
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