Coinbase opens IPOs to retail investors with Oura first. The prospectus does not say how big the slice is

Coinbase is letting eligible U.S. customers request shares in initial public offerings at the offer price, before trading starts, beginning with smart ring maker Oura's IPO this week, the company said on Monday, according to Benzinga and CryptoSlate. The orders run through Coinbase Capital Markets, its FINRA-registered broker-dealer, with Apex Clearing handling clearing and custody. Coinbase shares were little changed at about $201 early Tuesday afternoon, according to Nasdaq data.

How it works

• Once a price range is set, customers fund a brokerage account and submit a conditional offer to buy. Orders can be changed or canceled while the book is open.
• Coinbase acts as a best-efforts selling-group member. It does not underwrite the deal or hold inventory; it collects customer orders and passes them on.
• Fills are not guaranteed. Coinbase said requests "may be filled in full, in part, or not at all," depending on how many shares it receives and how much customers ask for.
• Selling within 30 days of the IPO can bar a customer from the program for the next 60 days, and repeated quick sales can mean smaller allocations later.

What Oura's prospectus says about the retail slice

The launch deal is the best guide to what customers can realistically expect, and Oura's amended registration statement is specific about some things and silent on the one that matters most.

It confirms that "a portion" of the stock will be offered to retail investors through Coinbase Capital Markets as a selling-group member, at Oura's request, on top of retail allocations made by the underwriters and through a directed share program. It does not say how large that portion is. Neither company has disclosed it.

The filing does show how much of the deal is already spoken for. Oura is offering 50 million shares at $40 to $44, and only 13.5 million of them are new shares from the company; the other 36.5 million are being sold by existing stockholders. Two cornerstone investors, Eli Lilly with up to $100 million and funds affiliated with Dragoneer with up to $300 million, have indicated interest at the IPO price. At the $42 midpoint, $400 million is about 9.5 million shares, or roughly 19% of the deal. The underwriters have also reserved up to 7.5% of the shares, or 3.75 million, for a directed share program for people chosen by management. The prospectus says the shares available to the general public shrink to the extent those buyers take up their allocations.

Coinbase is also not the only retail route into this deal. Robinhood Securities is listed among the 18 underwriters.

What it means for traders

For a retail investor, the practical point is that access to the order book is not the same as getting shares. In a popular deal, the portion left for selling-group members can be small, and partial fills are likely. The flipping rule matters too. Federal securities law does not prohibit selling IPO shares quickly, but brokers can restrict future access, and Coinbase has chosen to do that. A customer who gets an allocation and sells on day one risks being shut out of the next two months of deals.

For Coinbase, the move extends its push beyond crypto into what it calls an "Everything Exchange." The company plans to add more deals as selling-group allocations become available, CryptoSlate reported. Our Oura IPO story covers the company's revenue and valuation, and our Coinbase explainer covers what is driving the stock.

Sources: Oura Inc. Form S-1/A; Coinbase, via Benzinga and CryptoSlate; Nasdaq. Share calculations by The Company Chronicle from the prospectus. This is market information, not investment advice.