Coinbase, Exchanges

Is Coinbase Stock a Good Investment?

Coinbase, one of the most popular cryptocurrency exchanges, went public on Wednesday. The stock opened at $381 and closed at $328.

28, down 13.4%.

Investors who were eagerly waiting for the Coinbase debut were disappointed as the stock failed to meet expectations. Many had expected the stock to open at around $500 and touch $1,000 in the near future.

Coinbase was founded in 2012 and is headquartered in San Francisco. It is one of the most popular cryptocurrency exchanges with over 35 million users.

Coinbase allows users to buy and sell cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc.

Coinbase went public through a direct listing on the NAsdaq stock exchange. In a direct listing, a company sells its shares directly to investors without hiring an investment bank to underwrite the offering.

The direct listing process is different from a traditional IPO in many ways. For starters, there is no roadshow or lock-up period in a direct listing.

NOTE: WARNING: Investing in Coinbase stock carries a high degree of risk. It is important to understand the risks associated with investing before making any decisions. Additionally, Coinbase stock prices can be highly volatile and may not always reflect the performance of the company. Investing in Coinbase stock is speculative and may not be suitable for all investors. You should conduct your own research and speak to a financial advisor before making any investment decisions.

Secondly, there is no underwriting discount or greenshoe option in a direct listing.

As per the latest SEC filings, Coinbase has around 56 million verified users with 2.8 million monthly transacting users.

The company has generated revenues of $1.8 billion in 2020 and is profitable with net income of $322 million last year.

Coinbase went public at a time when Bitcoin prices are near all-time highs. Bitcoin surged to a new high of $61,781 on Saturday and is currently trading around $57,000 levels.

Ethereum prices are also near all-time highs and are currently trading around $2,075 levels.

Many institutional investors have started investing in cryptocurrencies in recent months due to the surge in prices. However, many individual investors are still cautious about investing in cryptocurrencies due to the volatile nature of prices.

Coinbase will be looking to capitalize on the growing institutional interest in cryptocurrencies. The company has already started Targeting institutional clients with its new products such as Coinbase Prime and Coinbase Custody.

The Coinbase IPO was highly anticipated but it failed to meet expectations as the stock opened below the reference price set by the NAsdaq exchange. While some investors may be disappointed with the debut, others see it as an opportunity to buy into a high-growth company at a attractive valuation levels.

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