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How Is Coinbase Stock Doing Since Its Blockbuster IPO?

Closing its first day of trading with an $87 billion valuation, Coinbase was the seventh-largest new U.S. public listing of all time.  

This article was originally written by MyWallSt. Read more market-beating insights from the MyWallSt team here.

But with global crypto markets in a tizzy over new government crackdowns, how has the company fared since?

Things could be better…

Since it began trading in April, Coinbase has failed to excite investors, despite pretty impressive figures in its first earnings report as a publicly-listed company: 

Total revenue of $1.8 billion, up almost 800% from the year previous. 

Earnings per share of $3.05 and net profit of over $771 million — more than fourfold the figure from the quarter previous.

It seems that the main worry for investors is that the company’s stock price tends to fluctuate in conjunction with the value of Bitcoin and other cryptocurrencies. And if there’s one thing we know about digital currencies, it’s that they are very volatile, even on a good day (never mind those times when Elon Musk sends the entire crypto market crashing with just a few short tweets). 

Back in May, Coinbase shares fell sharply with the price of Bitcoin during the crypto crash. Coinbase shares have still not recovered from the crypto dump and are down over 20% from its IPO date. 

 

So what’s the big takeaway from this story? 

Firstly, Coinbase is a great example of why you should practice patience and wait a few months before investing in a company that has recently listed. This allows its share price to settle a little. 

Secondly, Coinbase is a unique company to invest in because its fortunes are inherently tied to a separate asset class. While the company’s common stock might be structured like any other publicly-listed company in the U.S., its fundamentals depend entirely on the fortunes of Bitcoin, Dogecoin, and other digital assets, which means that you really have to be bullish about the future of cryptos to be bullish about Coinbase.

With countries like China and Britain making big moves to curtail the use of Bitcoin and similar cryptocurrencies, there’s sure to be a lot of uncertainty ahead.

 

MyWallSt gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team posts daily insights, subscriber-only podcasts, and the headlines that move the market. Start your free trial now!

 

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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