Cryptocurrency giant Coinbase Global Inc. is gearing up for what investors expect to be a stock market blockbuster, although doubts remain about its high valuation.
Coinbase plans to go public on Wednesday via a direct listing on the Nasdaq Stock Market. The company, which operates the largest US exchange for bitcoin and other digital currencies, could achieve greater market capitalization than any of the traditional exchange operators in the world. But it faces a number of threats, including competition in the rapidly evolving cryptocurrency industry, which could undermine its stock price in the long run.
Based on the price of Coinbase stock trading in the private market earlier this year, the company is worth $ 91.5 billion on a fully diluted basis, filing filings show. And Coinbase reached that valuation even before its first quarter burst results were announced, when it took advantage of a massive hike in the price of bitcoin.
During the first three months of 2021, Coinbase attracted 13 million new users and estimated a profit of $ 730 million to $ 800 million on revenues of $ 1.8 billion. Even at the lower end of that income range, that’s more than double last year’s earnings.