About nine months ago, Coinbase’s initial public offering (IPO) via a direct listing on Nasdaq was launched and the shares traded for $342 on April 16, 2021.
Since then, stock prices have dropped by almost half that amount. Today, the 3rd of February, COIN is trading for minus 45% of its all-time high at $187 per unit.
Despite Coinbase having 8.8 million users and being one of the largest BTC companies in the world, it has so far been unable to decouple its value from crypto market sentiment.
So as the company enters its tenth year of operations, the stock is trading for far less than it once was.
When BTC hit its all-time high of $69K in November, COIN also surged. The shares were even traded at the April price, US$ 342.
But today, both Coinbase shares and the price of BTC are down, with the cryptocurrency priced at $36,700.
In a recent post, Boston-based data and analytics firm Trefis assessed whether Coinbase shares were a good buy after such a considerable correction:
“Stocks are currently trading at about 22 times our projected earnings for 2021. That’s not a particularly rich valuation for a highly profitable, futuristic stock with solid long-term earnings potential.”
The company added, however, that the cryptocurrency market is inherently cyclical. So chances are we are approaching a market peak, given the Fed’s stance on interest rates.
“This could undermine Coinbase’s momentum in the short term. That said, the action could still be worthwhile for long-term investors,” he pointed out.