USV Dumps 100% of Coinbase Stock | Hacker News Reader

USV Dumps 100% of Coinbase Stock

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The title is wrong. This is simply a technicality.

If USV moves the shares to another fund or distributes them back to their investors (LPs) they would appear here. This does not mean that they “dumped” 100% of their shares.

Wait... What is the difference between selling to give back to your investors vs selling to do anything else. It's still selling.

When you sell any stock, it means you believe your future appreciation is going to be greater elsewhere. If investors thought there was another 150,000% gain to be had here, they wouldn't sell.

No, if you give back to your investors they may still hold the stock; it’s up to them what to do. You’re just transferring the stock from your account to theirs.

On top of that, funds like these are usually running for a set amount of time. One of the USV funds in question here is 9 years old and likely have a 10 year horizon. They're well into the phase where they're seeking to figure out whether to seek a sale or do what they did here and hand the shares to their limited partners.

This editorialized title makes it easy to quickly arrive at a misunderstanding of the situation.

Email the mods using the footer contact link and ask them to return the title to the original, uneditorialized one.

There’s an emerging pattern of this relative to Coinbase. I just can’t tell if it’s schadenfreude or scaremongering.

There is a contingent on HN that hates anybody doing well with crypto.

That contingent consists of those who have been wrong about crypto for 8 years, so to acknowledge their error now would require them to account for how their ideology and weltanschauung are at in conflict with the world as it actually exists.

Do you mean cynicism against Coinbase? To be honest I see editorialized titles as an emerging pattern in general (which is neither definitely good nor bad in my view, often times it removes clickbait or points out what's remarkable about the linked page).

Just specifically related to the stock. I’m seeing these stories surface all over.

Lol the title IS the clickbait here, just as elsewhere. Interested parties react on emotion that's implied in the title. Oftentimes, as here, the title is exaggerated or alarmist or intended to invoke an emotional reaction that gets people to CLICK on it. Hence the term.

considering the recent timing of the IPO it's safe to assume substantial monetary losses or gains depending on public perception of solvency.

FYI: Union Square Ventures bought into coinbase at $0.20 per share. If they sold for around $300 then thats a gain of around 150,000.00% (in the same period if they had bought bitcoin for $128 in 2013 and sold for $60,000 that would only be and a gain of 47,000%)

Other interesting USV exits: https://www.crunchbase.com/organization/union-square-venture...

> 150k% ... would only be 47k%

So in other words, they only got a 3x return on their bitcoin investment.

You could argue investing in Coinbase had lower risk than investing in Bitcoin directly (was it?). Then the risk adjusted return would be even better.

It's a fund with a 10 year period. The need to exit 100%.

Footnotes are revealing. Here's the first of 7. FYI rest 6 are similar looking :

"1. On April 14, 2021, Union Square Ventures 2012 Fund, LP ("USV 2012 Fund") distributed, for no consideration, 7,702,041 shares of the Issuer's Class A Common Stock to its limited partners and to Union Square 2012 GP, L.L.C., the general partner of USV 2012 Fund, representing each such partner's pro rata interest in such shares. On the same date, Union Square 2012 GP, L.L.C. distributed, for no consideration, the shares it received in the distribution to its members, representing each such member's pro rata interest in such shares"

I don’t understand what that means. Could somebody explain in plain English, please?

It just says the fund distributed shares to their partners and holding company, and the holding company further distributed shares to their members.

What exactly is revealing about that?

It tells a different story than “USV dumps 100% of Coinbase”

Coinbase was a direct listing. The only shares available were the ones already owned by employees/investors.

I like the simplicity of their website: https://www.usv.com

single sentence thesis explanations with a list of investments.

They're a VC firm, not a hedge fund. VCs don't hold onto stock long term, they exist solely to exit, give a share of returns to LPs and partners, and use the next fund they raise to invest in the next batch of companies.

all of those transactions for $0 are actually distributions to the partners. the shares aren't necessarily sold.

Huh? They’re a VC, they exist solely to exit companies once they’ve made a return

They have LPs. LPs need an exit.

What does it mean for a layman?!

To some, it raises questions about the fundamentals of the business[0]

[0]:https://twitter.com/nntaleb/status/1383860897999851521?s=19

Make sure to read the replies to this one, as the tweet you have linked to seems to massively misrepresent the sales in question (presenting them as proportions of these peoples total holdings, rather than the proportion of the shares they'd registered to sell)

Compared this, from the quoted tweet:

> On the same day #Coinbase CEO @brian_armstrong was on @CNBC publicly pumping COIN, he was privately dumping 71% of his shares.

with [1]:

> CEO Brian Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per for total proceeds of $291.8 million, according to one filing. While a Coinbase representative declined to comment due to the company being in a so-called “quiet period,” based on filings made before the listing, it would indicate Armstrong sold about 1.5% of his stake.

[EDIT: I'll note that both Taleb and the person he quoted have had their mistake pointed out to them and have just ignored it, which frankly is a pretty awful look]

[1] https://finance.yahoo.com/news/coinbase-ceo-sold-291-8m-2350...

Unfortunately he is quite unpleasant on Twitter, except for when he talks about food or language. Disagreements usually seem to end up in being blocked by him.

You are going off-topic.

The case in point is USV selling all their stake in a company and what that means for the business.

I didn't say anything about the CEO

USV isn't selling their stake either At least nowhere near all of it. As the filing itself says, a lot of is being disposed of to their LPs (the owners of the capital in the fund). This is normal practice when a fund is preparing to wind down. The headline here is flat out wrong. You then linked to a tweet which spread further misinformation.

This and the Brian Armstrong story seem to be intentional or ignorant mischaracterizations of what is happening.

There are two very different possible reasons:

1. They believe the price will drop and want to sell before that happens. If this is the case, it raises the question why they think the company is overpriced since, as somebody involved with the company for a long time, they might have insights the public missed.

2. They want to cash out for reasons unrelated to the company. For example because their investment model is to invest in a private company, wait until it goes public, and then sell.

3. They're a time-limited fund that needs to dispose of assets to their LPs (limited partners) before the fund closes down. They can do so by selling the shares, or they can do so by transferring the shares to their LPs. In this case as you can see in the footnotes, as a substantial proportion of these shares where transferred to their LPs, not sold.

I consider that part of option 2.

It's the example you gave in #2, that's how VC firms generally work.

"Democratize finance until you can get billions of dollars instantly."

EDIT: I enjoy AVC.com, I'm kind of poking fun at potential naysayers

easier interface to sift through info from this form: http://openinsider.com/search?q=coin

Let your winners ride...

Usv takes fireexit.

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