Cryptocurrency had a banner week in an already big year. Over the past day, the value of Bitcoin set a new high and the digital currency exchange Coinbase, the most valuable American cryptocurrency company, announced that it had filed for an initial public offering with the Securities and Exchange Commission. As the DealBook newsletter discusses, there are both practical and philosophical issues with Coinbase’s listing.
Cryptocurrencies like Bitcoin are borderless, decentralized assets championed in particular by libertarians, anarchists and others who reject centralized control and regulation. Coinbase is in the business of popularizing these rebel currencies via an app that makes it easy for anyone to trade Bitcoin like they would stocks or bonds. An I.P.O. would thrust Coinbase — and by extension, cryptocurrency — further into the mainstream, with regulators, bankers and other trappings of official legitimacy.
Coinbase is “spiritually” built for an offering of digital tokens, Fred Ehrsam, a co-founder of the company, told Fortune. But for all of the bullishness about Bitcoin at the moment, tapping traditional sources of institutional funds could be a more lucrative route, with less regulatory uncertainty.
The traditional I.P.O. underwriting process could be fraught, too. Misreading retail demand in the market debuts of Airbnb and DoorDash made other I.P.O. hopefuls rethink their plans. Adding crypto true believers into this mix only increases the difficulty. That could make a direct listing more appropriate, from a pricing efficiency view, as previous reports have suggested. (Slack and Spotify went public this way, in which shares are sold directly to the public, bypassing intermediaries.)
Coinbase was last valued at $8 billion in a funding round in 2018, but may be worth more now, thanks to the surge in crypto prices and the frenzy for tech stocks. Brian Armstrong, Coinbase’s chief executive, recently addressed the rapid rise of the Bitcoin price on the company blog:
“While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk.”
Whatever stock investors think Coinbase is worth as it prepares to list, crypto investors are convinced that Bitcoin’s long-term prospects are bright. “It’s gold 2.0 for sure,” said Daniel Polotsky of CoinFlip, a Bitcoin A.T.M. company. “It’s going to eat gold’s lunch.”
For larger dine-in chains, the ever-changing patchwork of rules around dining poses a particular logistical challenge: How do you come up with a companywide approach when different locations are dealing with their own specific regulations?
New restrictions have been placed on indoor and outdoor dining, though they are far from uniform (no indoor dining in Philadelphia, Chicago and New York, indoor dining curfews in New Jersey and Massachusetts, no restaurant dining at all in much of California).
Restaurants must work with local health departments that hand down specific guidance on measures that must be taken to prevent the spread of the virus. Some require outdoor dining tents or structures that have no more than two walls to provide adequate ventilation. Others want three sides of tents to remain open.
Left with empty dining rooms, casual and upscale dining chains moved quickly to beef up or offer to-go options the first time around. They started curbside pickup and signed on with food delivery partners like DoorDash and Grubhub. Some states loosened liquor laws, allowing chains to offer alcoholic beverages for takeout. And when restaurants were allowed to serve diners again, with restrictions, many rented tents or opened up patios to create outdoor seating.
But chains saw uneven performance among their restaurants.
By the end of summer, Olive Garden restaurants were averaging $70,000 in sales per week. But sales at the chain’s superstar restaurant in Times Square in New York, which was offering only takeout during the summer, plummeted to $17,500 per week, down from roughly $288,000 per week, executives of Darden Restaurants, which owns Olive Garden, LongHorn Steakhouse and The Capital Grille, told Wall Street analysts in September.