Category: Finance

Coinbase’s $100 billion lPO provides an alternate investment to bitcoin

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Coinbase , the San Francisco-based cryptocurrency exchange, is going public on April 14. The company will trade under the ticker COIN and list 114,850,769 shares on the NASDAQ with an initial valuation of $100 billion. Instead of following the traditional initial public offering (IPO) route, Coinbase plans to post its shares straight on the NASDAQ exchange via a direct listing, a technique pioneered by big names like Spotify and Palantir in recent years. Whereas an IPO involves a company creating new shares and having an underwriter that buys them for a set price and then sells them to the market, in a direct listing a company sells existing shares and has no underwriter. But what is Coinbase and why is this such as important development in the cryptocurrency market? The Coinbase business model Coinbase was founded in 2012 by Brian Armstrong, a former engineer at Airbnb, and Fred Ehrsam, who was a trader at Goldman Sachs. Their mission was to make investing and transacting in cryptocurrencies easier, more efficient, and fairer. The company has since risen to become the largest cryptocurrency exchange in the U.S. Even though there are numerous other exchanges around the world with considerably larger trading volumes, including Binance, Huobi, and OKEx, Coinbase’s growth has been incredible lately. Read More …

How the tech industry is sewing confusion about privacy laws

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Alastair Mactaggart founded and bankrolled the privacy activism organization that pushed California’s landmark privacy law–the California Consumer Privacy Act (CCPA)–into the books in 2018. The law spurred the introduction of similar privacy bills in states around the country, and it will likely give shape to an eventual federal privacy law. As the story goes, Mactaggart, who made his fortune in the Bay Area real estate market, spoke to a Google employee at a cocktail party in 2016 who told him he’d be surprised at the amount of data the search giant had on him. Alarmed, Mactaggart and his friend Rick Arney hatched the idea of proposing a ballot measure to ensure privacy rights for Californians, and signed on attorney Mary Stone Ross to help shape a new law. The ballot measure eventually gave rise to a comparable bill in the state legislature, which, despite heavy blowback from the tech and telecom lobbies, was quickly passed and signed into law by then-governor Jerry Brown. The CCPA gives Californians the right to know what data tech companies like Google and Facebook are collecting on them, the right to stop that data from being shared or sold, and the right to sue if a tech company fails to protect their personal data. It was the most extensive consumer privacy law in the country at the time. Mactaggart’s group, Californians for Consumer Privacy , pushed another ballot measure in 2020, Proposition 24, that strengthened the CCPA. Voters passed the measure, and the proposition became the California Privacy Rights Act (CPRA), which goes into effect at the start of 2023. The law also establishes a new privacy agency called the California Privacy Protection Agency, with a 5-member board and a $10 million annual budget. While a number of states have followed California in passing their own consumer privacy laws , the vast majority of states still have weak or nonexistent privacy laws. Now Democrats and Republicans in Congress are trying to how to work together to pass a national privacy bill . A number of bills were floated in 2020, along with a major bill (from Rep. Suzan DelBene, D-Wash.) in 2021, but none has advanced very far. Meanwhile, the tech and online advertising industries are lobbying hard for a weak federal privacy law that might preempt stronger state laws, such as California’s. I spoke with Mactaggart about the state of data privacy today, and about the chances for a meaningful federal privacy law in the near future. The interview has been edited for length and clarity Read More …

Despite the rise of remote work, tech hubs are here to stay

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With the pandemic reshaping the way we work, many articles predict the demise of cities as startup hubs and promote the ascendancy of remote (and rural) tech capitals. While the technology-enabled exodus to remote workforces has been a blessing for companies operating under COVID-19 restrictions—and dramatically increased opportunities for disabled workers—don’t rush to that tiny rural town too soon. The attractions of cities are less enticing during a lockdown, to be sure. But in the long-term, metropolitan areas offer advantages that can’t be duplicated in fully remote settings. The diversity of cities provides fertile ground for connecting with people who share similar passions and interests. Whatever your preference, whether personal or professional, cities have a large population of others who can spark and nurture creativity and innovation. The suburban flight we saw in the 1950s and ’60s has reversed, led by younger people who value the amenities and attractions of urban life. Walkability and access to bike lanes and ride-share services allow reduced reliance on automobiles. Vibrant cultural scenes, restaurants, and retail are obviously big draws, which will become even more attractive on the other side of the pandemic. Where people once retreated to suburbs when starting their families, many cities now have competitive and desirable schools—enhanced by nearby parks, museums, and child-friendly activities. As population density is increased, each individual’s carbon footprint is lowered. And there are huge economies of scale in areas like healthcare and public transportation Read More …

The simple reason tech CEOs have so much power

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Coinbase’s plan to go public in April highlights a troubling trend among tech companies: Its founding team will maintain voting control, making it mostly immune to the wishes of outside investors. The best-known U.S. cryptocurrency exchange is doing this by creating two classes of shares . One class will be available to the public. The other is reserved for the founders, insiders and early investors, and will wield 20 times the voting power of regular shares. That will ensure that after all is said and done, the insiders will control 53.5% of the votes . Coinbase will join dozens of other publicly traded tech companies —many with household names such as Google, Facebook, Doordash, Airbnb, and Slack—that have issued two types of shares in an effort to retain control for founders and insiders. The reason this is becoming increasingly popular has a lot to do with Ayn Rand , one of Silicon Valley’s favorite authors , and the “myth of the founder” her writings have helped inspire Read More …

Could 13,000 smart thermometers keep Nebraska COVID-19-free?

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The vast majority of Nebraska is composed of rural territory: wide swaths of land occupied by pockets of roughly 2,500 people. Despite the state’s diffuse populous, it, like others, has struggled to contain the spread of COVID-19 over the past year. School officials are especially wary, despite the Centers for Disease Control and Prevention’s recently released guidelines that reduce social distancing for students to 3 feet. Towns in rural Nebraska and several other regions around the U.S. are investing in new measures to keep schools safe from COVID-19 and future viral outbreaks. To finance these initiatives, they’re turning to local government organizations as well as corporate sponsors. A health tech company called Kinsa has sent some 21 school districts and six private schools in Nebraska 13,000 of its smart thermometers to help keep better track of sick students. School principles and nurses get a digital dashboard where they can view students’ anonymized symptom and fever data, broken down by grade. Parents are encouraged to take their children’s temperature before coming into school, where students are also required to wear masks. “Nebraska is very independent,” says Burke Harr, a former state senator who now counsels the Nebraska Cooperative Government, a group that ensures 93 small counties and towns in the state have the funding for roadway repairs and other common local infrastructure. “We were trying to find the least intrusive way to help predict where COVID may or may not be and to stop its spread or to at least alert us of where there was an issue.” In May 2020, Nebraska saw a small spike in cases, a significant portion of which were coming from meatpacking plants. Then in November, the state saw a steep incline, reaching a peak of 3,500 new cases per day. Some of the most high-risk areas were also some of the least populated. Boone County, for example, currently has one of the worst rates of COVID-19 infection in the state and has a population of only 5,200. “It hit rural Nebraska because there were less precautions taken,” says Harr, noting that in some parts of the state you’d be hard-pressed to find someone wearing a mask. “There isn’t the compactness of the cities, but there were spreader events Read More …