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In brief
Coinbase is opening IPO allocations to eligible U.S. retail customers through its app.
Smart-ring maker Oura will be the first company offered through the service.
Customers who quickly sell allocated shares could lose access to subsequent offerings.
Coinbase is making a bigger play for retail investors by adding IPO share allocations to its expanding lineup of traditional investments. The crypto exchange will open the service to eligible U.S. customers this week with smart-ring maker Oura’s planned Nasdaq debut.
According to a Monday announcement, eligible U.S. customers can request Oura shares at the IPO price through the Coinbase app before public trading begins this week. Coinbase said the move is “another tool that allows them to access more assets in a more complete financial ecosystem.”
“We’re focused on growing the Everything Exchange for our customers,” a Coinbase spokesperson told Decrypt. “A natural step in that direction is to give our customers in the US early exposure to high-interest companies before they hit public exchanges.”
Coinbase said it chose Oura because the high-profile IPO coincided with Coinbase Capital Markets receiving regulatory approval to participate in IPOs. The smart-ring maker plans to list on Nasdaq under the ticker “OURA,” offering 50 million shares at an expected price of $40 to $44 each.
To participate, Coinbase said, customers select an offering through the IPO page in Coinbase’s app, fund their accounts, and submit a “Conditional Offer to Buy” after the expected price range is published. They must also complete a standard FINRA questionnaire used to screen for restricted status.
An order does not guarantee an allocation, however. Requests may be filled in full, partially filled, or rejected, depending on demand and the number of shares Coinbase receives from underwriters.
Customers can revise or cancel their requests while the order book is open. Allocated shares are booked at the final IPO price and become tradable when public trading begins.
Coinbase said its allocation system prioritizes investors who hold their shares.
“Our allocation algorithm prioritizes investors who believe in what they’re purchasing for the long haul,” the company said. “Selling IPO shares within the first 30 days may result in being barred from IPO participation for the following 60 days, with smaller and less frequent allocations given to those who repeat this behavior compared to investors who hold their IPO shares for longer durations.”
In a disclaimer, Coinbase emphasized that its securities business is separate from the digital-asset services offered by Coinbase Inc.
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