The Intercontinental Exchange (ICE) has sold its stake in Coinbase, the cryptocurrency exchange operator that is valued at $1.6 billion, Bloomberg reports, citing people familiar with the matter. According to Bloomberg, ICE sold the stake to a number of investors. The sale price of $1.2 billion represents a return of about eight times the amount that ICE invested in Coinbase in November 2017.
Intercontinental Exchange, operator of the New York Stock Exchange and owner of digital assets platform Bakkt, has sold its 1.4% stake in Nasdaq-listed cryptocurrency company Coinbase recently.
In announcing the news on Thursday during its Q1 2021 financial results conference call, ICE CFO Scott Hill said the company had sold its stake in Coinbase for $1.2 billion. The CEO said net after-tax proceeds from the sale are about $900 million.
Mr. Hill stated that the funds received were used to reduce ICE’s debt at the end of the first quarter. He noted that the company’s theoretical leverage ratio, or the ratio of total debt to equity, would have been closer to 3.6x, compared to 4.2x when ICE acquired mortgage software company Ellie Mae in September 2020.
We are definitely slightly ahead of schedule and we are paying off our debt faster than we expected when we started the operation. I would say we were doing that before we sold Coinbase, added ICE’s future CFO Warren Gardiner. He noted that Coinbase’s earnings give the company some additional flexibility for the rest of the year. We are at about 3.6 leverage, the target is 3.25, when we can start thinking about buying back shares, he said.
ICE’s decision to sell Coinbase shares comes at a time when the company reported record revenue of $1.8 billion in the first quarter of 2021, up 4% year-over-year. First quarter sales, operating income, adjusted net income and adjusted earnings per share were the best in our company’s history, said our CFO. He said that although total revenue from ICE transactions had declined slightly from last year, total recurring revenue had increased by 9%.
As previously reported, Bakkt, ICE’s digital asset trading platform, plans to go public on the NYSE in the second quarter of 2021 via a merger with VPC Impact Acquisition Holdings.
Coinbase, the largest cryptocurrency exchange in the United States, went public on the 14th. April on the Nasdaq with a direct listing of its COIN shares. The stock opened at $381, indicating an increase in institutional demand as the underlying share price was only $250 prior to listing. Coinbase shares closed Thursday at $294 after a gradual decline following the IPO, according to TradingView.
Real time graph of the share price ofCOIN. Source: TradingView
As Cointelegraph previously reported, many COIN investors, including executives from Coinbase, sold $5 billion worth of COIN shares shortly after the IPO. Among the notable sales, Coinbase CEO Brian Armstrong sold nearly 750,000 shares for a total of about $292 million.
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