Coinbase’s Valuation at $86 billion has been exaggerated by the media as the Coinbase shares closed at $327 on their Nasdaq debut as we can see more in today’s Coinbase stock news.
Fully diluted which refers to the total number of common shares that are available to trade on the open market after the possible sources of conversion. Some feel this measure gives an inaccurate valuation because it includes options and restricted stocks which therefore overstates the number of shares that are used in the valuation.
In the buildup to the IPO, analysts expected Coinbase to hit a $100 billion valuation but of course, it was less than that at the end of the day. The exchange is not the first company to test the US public market with its IPO being hailed as a turning point on the crypto going mainstream with analyst Dan Ives writing:
“Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of bitcoin and crypto for the coming years in our opinion.”
$COIN opened at $381 on Nasdaq Global Select Market and the buyers pushed the price as high as $429 but then dipped and ended the session at $327. The company released impressive figures before the public debut and showed a strong surge in revenue and doubling of the monthly active users compared to the past quarter. The market research firm New Constructs already sounded the alarm on the overvaluation at $100 billion and they also believe that this high valuation takes no account of another possible squeeze on the transaction margins:
“The company has little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high expected valuation of $100 billion.”
Coinbase’s valuation came in at $86 billion which is in the middle of the pre-debut expectations between $60 billion and $100 billion. According to CIO at Arca Jeff Dorman, this figure is grossly overstated in the media. Dorman slammed the media for misinformation and bad reporting:
“That math is wrong — There are 198mm class A and class B shares o/s, not 261mm. If we use fully diluted share count, then every stock on the planet has infinite shares due to no restrictions on how much stock a company can issue.“
Larry Cermak on the other hand noted:
“Direct listings almost always trade down in the next few days because of the high float that’s being dumped. As long as the bull market continues, it will eventually recover and go $100B+ IMO. Low volume today is somewhat surprising though.”
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