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Monitors display Coinbase signage ahead of the start of trading in the stock.
Michael Nagle/Bloomberg
Coinbase
designed its public stock listing to let retail investors get in on the ground floor. Now that ground floor is rising fast, and demand has been enormous for the shares. Investors at one broker focused on the millennial and Gen-Z crowd are willing to set remarkably high limit orders to get in.
“We’ve been taking orders since 7 a.m. this morning. We have hundreds of thousands of orders waiting to go into the stock,” said Anthony Denier, CEO of broker Webull, a competitor to Robinhood that attracts younger investors. “This IPO is the most talked about stock I have ever seen since
GameStop.
That is kind what it feels like. It has that it has that same sense of: ‘This is our opportunity’”
Webull has been preparing for days and increased its cloud-computing capacity just for this event. A limit order is a request to buy at any price up to a specific level.
On Tuesday, Nasdaq revealed that the reference price for Coinbase stock was $250. The reference price is simply a benchmark for investors, based on recent private trading activity. A little after noon on Wednesday, just ahead of the opening of trading, the opening price was indicated at $371 on Nasdaq.
In a traditional initial public offering, banks run the show, determining the opening price and generally giving their clients a first crack at buying. But in a direct listing like Coinbase’s, other investors get to bid on the shares before the opening.
Denier said that investors can only put limit orders in, and that he was seeing clients put in enormous numbers—as high as $2,000, which would mean they are willing to buy at a valuation for the company of more than $500 billion.
Normally, Webull can’t process limit orders that are well above current prices because market-makers will send them back to the broker. That can be a drain on the entire system, but Denier said that Webull is extending what it will accept for this event.
And the numbers keep going up. “From what we see, retail is all in,” he said.
Write to Avi Salzman at avi.salzman@barrons.com
