Why is Coinbase Planning to Sell its Stocks?
CEO Brian Armstrong, set in motion a plan to sell up to 3,750,000 shares of Class A common stock, potentially generating $684 million based on Friday’s closing price.
Several high-ranking executives and directors at Coinbase, a cryptocurrency trading platform, have recently adopted 10b5-1 trading plans, paving the way for the potential sale of over $900 million worth of shares.
These plans, designed to remove the appearance of insider trading, will see the automatic execution of trades based on predefined conditions such as price, volume, and timing.
Among those adopting these plans are Coinbase co-founder, chairman, and CEO Brian Armstrong, who has set in motion a plan to sell up to 3,750,000 shares of Class A common stock, potentially generating $684 million based on Friday’s closing price.
Effective from November 18, 2024, and lasting until November 14, 2025, signifies a shift in Armstrong’s previous stance, as he last sold Coinbase stock in September 2023.
Coinbase Co-founders Plan to Sell
Adding to the anticipated sales, Coinbase Chief Financial Officer Alesia Haas has adopted a plan to sell as many as 153,896 Class A shares, with an estimated start date of January 2, 2025. Her plan also allows for the sale of shares to cover costs associated with the exercise of stock options.
Further contributing to the impending stock sale is Coinbase co-founder and director Frederick Ernest Ehrsam III, whose plan allows for the sale of up to 866,122 Class A shares, starting on November 25, 2024. This plan comes as Ehrsam, also a co-founder of crypto-focused investment firm Paradigm, navigates his dual roles within the industry.
Adding to the list of executives with 10b5-1 plans are Coinbase’s chief legal officer and secretary Paul Grewal, who will sell up to 151,005 Class A shares, and Coinbase director Fred Wilson, who has outlined a plan to sell up to 50,000 Class A shares.
While Coinbase has not provided specific comments on the motivations behind these plans, Chief Financial Officer Alesia Haas has previously stated that these sales account for a “small portion” of the insiders’ total holdings. She further emphasized the long-term conviction of these individuals in the company’s future.
The unveiling of these 10b5-1 plans comes at a time when Coinbase stock has shown a modest 5.1% gain year-to-date, a performance that lags behind the 20% rise in the S&P 500 index.
