It has been recently reported by multiple sources that the executives and directors of Coinbase, one of the leading cryptocurrency exchanges, have proposed plans to sell up to five million shares. The sell-off is expected to rake in over $900 million.
The Trading Plan
According to reports, the Coinbase bigwigs have adopted trading plans to sell no more than five million shares. This sales strategy has been approved under Rule 10b5-1 which allows executives to establish a schedule to trade stocks. This is done to prevent any form of insider trading. The sales plans have been revealed in recently disclosed regulatory filings with the Securities and Exchange Commission (SEC).
Brian Armstrong’s Sale Plan
Key among those who have come up with the said trading plans is Brian Armstrong, the co-founder and CEO of Coinbase. He plans to trade a maximum of 3.75 million Class A stocks. It’s worth noting that this chunk of shares will be converted from Class B shares from his trust. Armstrong’s plan will kick-start on November 18 and may continue up to November 14, 2025.
Chief Financial Officer, Alesia Haas’ Plan
In the same vein, Alesia Haas, Coinbase’s Chief Financial Officer, has also adopted a similar strategy. She plans to sell up to 153,896 Class A shares. Haas’ plan will commence in the New Year on January 2, 2025 and will last until the last day of the same year.
Sale plans of co-founder Frederick Ehrsam III and Chief Legal Officer, Paul Grewal
Frederick Ehrsam III, the co-founder of Coinbase, plans to commence selling his Class A shares from November 25, with the total shares amounting to 866,122. Also, Chief Legal Officer Paul Grewal’s selling plan of up to 151,005 Class A shares will begin from December 2. Sharing the same selling line, Coinbase’s director Fred Wilson plans to begin selling his Class A shares starting November 7. His selling quota has been identified as approximately 50,000 Class A stocks.
Trace of Previous Sales
This development, as huge as it appears, comes as a déjà vu. Last December, multiple reports indicated that Frederick Ehrsam III, sold millions worth of shares from Coinbase. Around the same time, the exchange’s executives cashed out on over $120 million in COIN shares. These sales happened when COIN’s stock had appreciated by 450% within 2023, and the stock price was sitting at $185.20. Interestingly, COIN shares slipped by 1.85% in pre-market trading, according to Nasdaq data, following the news of this latest series of planned sales.
Implications of the Sales
As at the time of these reports, the impact of such a substantial volume of sales within a short interval on the company’s stock value is not clear. Hypothetically, though, such sales are likely to dilute the market, which might cause a slump in the stock value. This could affect large and small investors alike and might be a blow to the company as well. Only time will tell what impact this strategic development will have.
