Coinbase’s co-founder buys $75 million of the company’s stock and the purchase was made via Paradigm, the venture capital firm that Fred Ehrsam co-founded as well so let’s read more today in our latest Coinbase news.
Over the past week, Fred Ehrsam bought more than a million shares of Coinbase worth $85 million and stepped in as the exchange’s stock prices dropped after the weak earnings report. According to a Form 4 filing with the US SEC, Ehrsam used Paradigm, a venture capital company that he also c-founded, to buy about 700,000 shares of Coinbase at an average price of $70 each or $50 million worth. Coinbase’s co-founder followed this up with the purchase of another 385,000 shares at an average price of $65 or about $25 million worth.
The purchases brought the holdings of Coinbase by Paradigm to more than $3.6 million shares and Ehrsam holds about 1.1 million shares via a trust. Last week’s purchase came with the Coinbase shares crashed by more than 70% in 2022 and of more than 80% from the ATH hit right after the company’s initial public offering a year ago. Ehrsam and other entities had been consistent sellers of the stock since the April 2021 IPO and unloaded a few hundred million dollars worth of shares. Ehrsam is also a co-founder of coinbase and is now on the company’s board.
As recently reported, In the past few years, Coinbase made a reputation as the leading crypto trading platform and competed for higher prices for the services in exchange for institutional investment opportunities and an easy-to-use platform. However, none of its major investments were able to isolate the company from the industry it belongs to, and with the crypto investors navigating through some rough waters, it seems that Coinbase is following suit.
While the trading platforms like Kraken, and Binance rely on staking and other ways of garnering revenue to make a profit, Coinbase is known for betting on transaction fees to keep their busienss rolling. The downside of the model is that when things get rough, the HODlers tend to double down and many become weary of the marekt conditions which means they are waiting for better opportunities. The bearish marekt of Q1 2022 led to a disappointing quarterly report and an all-time low for the COIN stock. Overall, Coinbase remains in good shape despite the poor work in the recent 10-q disclosure filing, and the CEO of Coinbase Brian Armstrong stated that the company is nowhere near bankruptcy, assuring investors that their funds are secure.
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