To assess Coinbase’s chances of achieving the huge future earnings required to reward investors buying at what’s expected to be a superrich price, it’s crucial to understand how its model works. 25: “We may earn money when revenues are high, and we may lose money when revenues are low, but our goal is to roughly operate at breakeven, smoothed out over time, for the time being.” Operate at breakeven for the time being? That doesn’t sound like a forecast that justifies a $100 billion cap that would make Coinbase the 13th most valuable financial services company in America, only $12 billion behind Goldman Sachs. As he stated in the IPO registration statement filed on Feb. But surprisingly, Armstrong is warning fans to expect the ultimate “fasten your seatbelts play,” cautioning that the ride will not only be bumpy as hell, but that consistent profitability is a long way off. To deliver for investors, it will eventually need to mint the kind of spectacular earnings it displayed in Q1, and race from there. Based on its shares sold recently in private markets, Coinbase is expected to command a market cap of around $100 billion, a figure unimaginable for a crypto exchange just a few months ago. Those results will rally crypto-obsessed investors on April 14, when Coinbase shares will debut on the Nasdaq in a direct listing, a trendy, damn-the-establishment choice that epitomizes the offbeat thinking of CEO Brian Armstrong. The country’s largest cryptocurrency exchange disclosed profitability from trading the likes of Bitcoin so gigantic that it waxes what the top Wall Street banks garner handling stocks and bonds in the best of times. On April 6, eight days before its planned IPO, Coinbase Global issued head-spinning results for the first quarter of 2021.
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