Coinbase Global is set to make its Wall Street debut on Wednesday through a direct listing of its shares on the Nasdaq.
The trading exchange, which is benefiting from the surge in demand for bitcoin, ethereum and other cryptocurrencies, now has 56 million active, verified users and manages about $223 billion in crypto assets. That’s about 11% of the total $2 trillion cryptocurrency market.
Coinbase estimated earlier this month that sales reached $1.8 billion in the first quarter and that it earned a profit of $730 million to $800 million during the first three months of 2021. That’s up from sales of $190.6 million in the first quarter of 2020 and net income of about $32 million.
The company also said in a regulatory filing in March that based on private market transactions, the company’s market value was worth nearly $68 billion — a staggering increase from the $8 billion Coinbase was valued at it when it last raised money from venture capitalists in 2018.
Some on Wall Street are betting that the stock will go significantly higher once it begins trading.
Santosh Rao, head of research at Manhattan Venture Partners, said in a report last week that it thinks Coinbase could be worth $98 billion. To put that number in perspective, it’s more than $30 billion above the current market cap of NYSE owner Intercontinental Exchange.
But that valuation is “ridiculously high,” according to David Trainer, CEO of New Constructs, an investment research firm.
What to watch: The Coinbase direct listing is the highlight of what could be a busy week for new stocks. Mobile marketing firm AppLovin, autonomous trucking startup TuSimple and senior-focused health care firm Agilon are each set to sell more than $1 billion in stock in initial public offerings.
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