Intercontinental Exchange Inc. (ICE), operator of the New York Stock Exchange (NYSE), has sold 1.4% of its stake in Coinbase (COIN) soon after the crypto currency exchange made its debut on April 14.
In a first-quarter earnings call, ICE chief financial officer, Scott Hill, said that the sale of the Coinbase shares generated $1.2 billion pre-tax. The sale happened amid all-time record revenues in a single quarter for the company. Hill defended the decision saying that the proceeds from the sale were used to stay ahead of schedule for debt payments.
Analysts have predicted volatility within the Coinbase IPO, particularly in its first days following a public listing. In the first quarter of 2021, the exchange generated more than double its revenue from all of 2020.
Coinbase debuted on the NASDAQ in mid-April 2021 with a valuation of approximately $90 billion and a market cap that briefly crossed $100 billion, widely considered a watershed moment for the crypto industry.
The first day of trading was marked by aggressive market transactions. Coinbase CEO Brian Armstrong reportedly sold nearly $300 million in shares across three sessions. Other early investors, like Fred Wilson and Marc Andreessen, also sold nearly 5.9 million shares.
On the other hand, ARK Investment Group reportedly purchased more than $300 million worth of shares. Total sales on the first day alone amounted to roughly $5 billion.
The timing of ICE’s sale of their COIN holdings suggests that they may have been part of the initial dump by major COIN investors. According to ICE’s Vice president for investor relations Warren Gardiner, however, the proceeds helped create “additional flexibility” for the remainder of 2021.
This is after cash generated from the first quarter was used to pay off $350 million in company debts, raise dividends by 10%, or was re-invested in the business.
Another ICE-owned cryptocurrency exchange, Bakkt, is nearing a public listing as well. Bakkt was launched in 2018 and serves as a digital asset marketplace. According to Hill, Bakkt’s merger with SPAC, Victory Park Capital Impact Holdings, is expected to be completed in the second quarter, for a combined valuation of $2.1 billion.