Matt Weller, CFA, CMT
April 7, 2021 4:01 PM
For those who haven’t followed closely, one of the biggest IPOs in years is slated for next week
In the United States, Coinbase is synonymous with cryptocurrency trading, and with major cryptoassets such as Bitcoin and Ethereum near their all-time highs after massive spikes so far in 2021, there is no has never had a better time for the company to go public (or in its case, offer shares in a direct listing under the symbol COIN)
In anticipation of this momentous occasion, Coinbase released its estimated first quarter financial results yesterday, and the numbers were staggering:
The company has also announced plans to spend billions of dollars on scaling and marketing in 2021 to maintain aggressive growth with such impressive financial numbers, exponential growth and a seemingly insatiable demand for investors for IPOs (see Snowflake, DoorDash, Airbnb, and Roblox, among others), it’s no surprise that Coinbase’s fully diluted IPO valuation is expected to start at over B $ 100!
Going forward, the most immediate risk to the company’s shares will be the still volatile price of Bitcoin and Ethereum In yesterday’s filing, Coinbase noted that “MTUs, trading volume and therefore transaction income are currently fluctuating, potentially significantly, with the price of Bitcoin and the volatility of crypto assets. This revenue unpredictability, in turn, impacts our profitability quarter over quarter. cycles can be very volatile and therefore [Coinbase] measures [s] [its] performance over price cycles instead of quarterly results. equity investors to gain exposure to the current bull market in crypto-assets, for better or for worse
The other major narrative to follow with Coinbase in the coming months will be Institutional Adoption As noted by management, “significant growth in 2021 driven by transaction and custody revenues given the increased interest from institutions in the crypto asset class’ is expected IF (and this is a large FI) large institutions continue to accumulate cryptoassets over the next few quarters, Coinbase is expected to be a major beneficiary
Either way, Coinbase’s IPO next week will be a key measure of investor appetite for cryptoassets and IPOs in general – stay tuned. Listen to our site and social media channels for full event coverage!
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Global News – United States – Coinbase IPO: What Can We Learn From The First Quarter Earnings Report Ahead Of The IPO stock Exchange?