Coinbase shareholders: Who owns the most COIN stock?
US-based Coinbase Global (COIN) is the world’s second largest cryptocurrency exchange by trading volume, and is used by stock investors as a proxy for taking positions on cryptocurrency markets without having to buy coins or tokens.
Coinbase listed on the Nasdaq Stock Exchange in April 2021, at the height of a cryptocurrency rally. Since then, the COIN share price has since declined by 78% as crypto markets have turned decidedly bearish.
Why is it important to know who owns the most shares of Coinbase? The biggest shareholders can move the share price if they buy or sell the stock in large volumes, which in turn affect the value of your investment/trade.
So, how much of Coinbase’s stock insiders own, and how does that compare to retail and institutional investment in the company?
In this article, we look at the breakdown of COIN shareholders.
Who owns COIN shares?
There are around 225 million Coinbase shares outstanding at the time of writing (7 October), according to data from Wall Street Zen. What is the balance of Coinbase shareholders between institutional, retail and inside investors?
On 7 October, the largest share of Coinbase stock was held by institutional investors, which accounted for 107.83 million shares, or 47.89% of the company’s total shares, the Wall Street Zen data showed. Retail investors held 76.8 million or 34.11% of the stock, while insiders owned the remaining 40.5 million
Who are the shareholders of Coinbase with the largest holdings? There are two inside investors among the five largest Coinbase shareholders, according to Wall Street Zen, with US technology entrepreneur and investor Marc Andreessen the single largest shareholder with a 6.32% holding of 14.2 million shares, valued at $938.62m at the time of writing (7 October).
Coinbase co-founder Frederick Ernest Ehrsam III is the fifth largest shareholder, with a stake of 3.78%, or 8.5 million shares valued at $561.62m.
Coinbase insiders have bought more shares in the company than they have sold in the past year, buying more than 1.36 million shares compared with sales of 1.19 million shares.
Coinbase’s biggest shareholders among institutions are AH Equity Partners III, one of Marc Andreessen’s investment vehicles, with a 4.83% stake, Vanguard Group with a 4.74% stake and ARK Investment Management with a 3.98% stake.
Let’s look more closely at the largest shareholders of Coinbase and their reasons for holding the stock.
Top five Coinbase shareholders
Marc Andreessen
Marc Andreessen’s venture capital firm, Andreessen Horowitz, led the $25m Series B financing round in Coinbase in December 2013. Andreessen has been on the company’s board of directors since December 2020.
In addition to Andreessen’s individual stake in Coinbase, Andreessen Horowitz holds an additional 1.43% stake, equivalent to 3.21m shares. Kathryn Haun, a General Partner at Andreessen Horowitz until late 2021 when she left to launch her own cryptocurrency investment fund, holds a 1.14% stake.
According to Coinbase’s initial public offering (IPO) prospectus filed with the Securities and Exchange Commission (SEC), Andreessen owned 5.5 million Class A shares and 23.96 million Class B shares in April 2021.
Class B shares were convertible to Class A shares at the time of the initial public offering (IPO). That made him the company’s largest individual shareholder behind co-founder and CEO Brian Armstrong, who held 2.75 million Class A shares and 36.85 million Class B shares.
Andreessen is known for co-founding Netscape, originally called Mosaic, the first web browser in 1994, backing startups during the dotcom era, and more recently investing in the likes of AirBnb (ABNB), Facebook (now Meta Platforms) (META), Lyft (LYFT), Pinterest (PINS), Slack and Stripe.
Andreessen is bullish on the long-term potential for cryptocurrencies, and in May Andreessen Horowitz closed its fourth cryptocurrency investment fund for $4.5bn, so it’s no surprise that Andreessen would hold a stake in Coinbase. An SEC filing shows that Andreessen sold some of his Coinbase shares in August 2021, but he remains the company’s largest shareholder.
AH Equity Partners III
Marc Andreessen is also connected to Coinbase’s largest institutional investor, as according to SEC filings, AH Equity Partners III is an investment vehicle for Andreessen Horowitz.
In addition to the 4.83% stake held by AH Equity Partners III, Wall Street Zen data shows another 1.75% stake held by AH Equity Partners II Parallel and 1.01% held by AH Equity Partners LSV I.
Vanguard Group
Established in 1975, Vanguard Group is the second largest asset management firm in the world behind Blackrock, according to ADV Ratings. Vanguard offers a range of investment products, advisory and retirement services to individual investors, institutions and financial professionals.
As of 30 June 2022, Vanguard had more than more than $7trn in assets under management (AUM) from 30 million investors and 411 funds worldwide.
Vanguard took the lead in creating stock market index-tracking mutual and exchange-traded funds (ETFs) to make investing more accessible and affordable for retail investors. Vanguard’s low-cost funds track the performance of benchmark indices such as the S&P 500 (US500) or US Tech 100 (US100) to give investors exposure to the markets without having to invest in individual stocks or pay high fund management fees.
With its 4.74% stake in Coinbase, valued at around $704m, Vanguard is among the institutional investors that have acknowledged the impact of cryptocurrencies as blockchain technology becomes increasingly mainstream. Vanguard has been using blockchain technology for capital markets data distribution since 2017.
ARK Investment Management
ARK is the investment management firm founded by Cathie Wood in 2014. it “focuses solely on disruptive innovation”. ARK provides active management products including ETFs, mutual funds and managed accounts, concentrating on the long-term effect of disruptive technologies. As of 30 June 2022, ARK had $24bn in AUM.
Wood is bullish on the long-term potential for cryptocurrencies as an investment class, having previously called for bitcoin to rally to $100,000. The COIN share price has tended to trend in the same direction as the bitcoin price, so ARK’s 3.98% stake in the company reflects that bullish view.
ARK analyst Yassine Elmandjra wrote in August:
Wood told Bloomberg in August that ARK sold 1.1 million Coinbase shares in response to a report in late July that the SEC was investigating the exchange as to whether some of its cryptocurrency listings could be considered securities rather than digital currencies. But the firm still owns more than 8.95m shares valued at around $590m, according to the Wall Street Zen data.
Frederick Ernest Ehrsam III
Co-founder of Coinbase along with CEO Brian Armstrong in 2012, Frederick Ernest Ehrsam III is the company’s second biggest individual shareholder and fifth single largest holder. In addition to his 3.78% individual stake in the company, Paradigm, a crypto-focused investment firm Ehrsam co-founded in 2018, holds a 1.65% stake.
Ehram stepped down as Coinbase’s president in 2017 but remains on the company’s board of directors. Ehrsam continues to trade Coinbase stock, selling shares worth more than $31m in December 2021 but buying back $75m in May 2022, according to SEC filings and Wall Street Zen data.
The bottom line
It can be helpful for retail investors to understand a company’s share ownership, as large stock purchases and sales can have a significant influence over the performance of the share price. You can keep track of the trading activity of Coinbase’s major shareholders by checking its SEC filings, as regulations require companies to disclose substantial changes in share ownership.
However, you should know that the trading activity of Coinbase shareholders is only a small part of the picture and should not be the main reason you decide to buy or sell the stock. Whether Coinbase stock is a suitable investment for you dependы on your investing goals, trading strategy, risk tolerance, and the size of your portfolio. It is essential that you do your own research before making any investment or trading decision. And never invest or trade money that you cannot afford to lose.