We’ve got a hot IPO set to drop on Wednesday. Coinbase (NASDAQ: COIN), the largest Bitcoin exchange in the world, is set to begin trading on the NASDAQ.
This is one of the most anticipated IPOs of the year. Here are some more details from the Motley Fool.
Coinbase is valued at roughly $68 billion on the private markets, but that rises to more than $100 billion when including Coinbase’s fully diluted share count.
The company offers an exchange to make it easy for the average investor to buy cryptocurrency, as well as a digital wallet to store it in. It doesn’t stop there. For more-advanced users, Coinbase Pro offers advanced charts and more-complicated trading options.
Coinbase boasts more than 56 million individual users, 7,000 institutions, and 115,000 partners in over 100 countries, giving the platform an unmatched ecosystem that caters to every level of cryptocurrency enthusiast.
Here’s My Take on the Coinbase IPO
I’m a big fan of Coinbase and I like this IPO. Coinbase is a direct play on Bitcoin and the broader cryptocurrency sector, and the company is reporting ridiculous revenue growth. A recent financial report showed the company growing revenue by 900% in the last 12 months. Here are the details from CNBC.
Revenue in the period jumped to about $1.8 billion from $190.6 million in the same quarter a year earlier, Coinbase said in a press release, adding that the results are preliminary and unaudited. Net income grew to between $730 million and $800 million from $31.9 million a year ago. Coinbase said it has 56 million verified users.
And keep in mind, we are still in the early stages of Bitcoin adaption. I see a lot more revenue growth for Coinbase in the next five to ten years and I think this company has a legit shot of hitting a market cap of $1 trillion.
However- this is going to be a volatile IPO.
Shares could begin trading a lot higher than planned. For example if shares are supposed to start trading at $50 it wouldn’t be a shocker to see first trades going off at $100. For prospective shareholders that’s not good. We like to buy low.
After that, I expect shares to be volatile in the short run but stability and upward movement in the long run. I think this stock will do very well in the long run.
Here’s How I will Trade this IPO
If shares begin trading at the expected price I will be aggressive and be looking to buy.
If shares begin trading much higher than the expected price I will be patient and look to buy on weakness or a pullback.
The Big Picture
Coinbase is set to begin trading on the NASDAQ on Wednesday. This is a highly anticipated IPO and for good reason – Coinbase is the worlds largest Bitcoin exchange and the company is experiencing ridiculous revenue growth. I’m a fan of Coinbase and this IPO but I do expect to see plenty of volatility.
I’ll be back with another update next week – have a great day!
Author Michael Vodicka owns shares of Coinbase (COIN).
Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading.