Nasdaq Is Disclosing Coinbase’s Reference Price This Afternoon. Here’s What That Means

When trading in crypto exchange Coinbase’s shares goes live Wednesday under the ticker COIN, market makers are going to need a gauge for where they should start trading.

That gauge is known as the “reference price” and the one for COIN will be released at the close of the U.S. equities market today by the equity exchange Nasdaq. The price is normally found by Nasdaq consulting with the company’s financial advisers (in this case Goldman Sachs) and is often the price at which the company last traded on private markets ($343.58 per share in Coinbase’s case).

The reference price will affect how much money the 114,800 Class A shares the company is selling to new investors in the offering will add to the company’s treasury, said James Friedman, senior fintech research analyst at Susquehanna International Group.

Should COIN trade below the reference price during the first few days of trading it would likely be considered a black eye for the exchange from a PR perspective, but Friedman said most equity analysts will have their eyes on Coinbase’s long game.

“There’s a lot more to the creation of public equity than its first day of trading,” Friedman said. “Square stock went down to $8 not long after trading because they lost the Starbucks account … now they’re above $200.”