Coinbase Closes First Day With Valuation Of $85.8 Billion, After Exceeding $100 Billion

Coinbase went public on the NASDAQ stock exchange yesterday through a direct listing, to become the first crypto company to have shares listed on a major exchange. The price skyrocketed, immediately pushing it to the top as investors grappled for shares.  

The listing gives investors the opportunity to venture into the crypto world indirectly, as a lot are skeptical about directly buying digital currencies. Owning a part of a crypto company like Coinbase, is like owning crypto, without buying into it directly.

Yesterday was a rollercoaster ride for the company as they started the journey with the share price of $381 per share, 52 percent higher than the $250 expectations set by NASDAQ, but went down to about $310, before going as high up as $429. The company shares finally settled at $328.3, giving the giant a total value of about $85.7 billion, if all shares are taken into account.  

The fluctuation in price can be attributed to the unpredictable and volatile nature of cryptocurrency, as warned in the company's financial prospectus. This week, Bitcoin hit an all-time high of $64,000, over two times its value at the start of 2021. It has however come down to about $62,000.

Coinbase has been one of the most profitable companies to come out of the startup space. In the first months of 2021 alone, the company made about $1.8 billion in revenue and about $800 million in net profit. 

Operating since 2012, Coinbase lets individuals and companies trade digital currencies like Bitcoin and Ethereum. It quickly became a success as more and more people are getting into crypto. Currently, the company has a market value of $86 billion, about four times the size of NASDAQ's $26 billion market cap, and less than $20 billion short of Goldman Sach's market value of $111 billion.

This puts founder Brian Armstrong, who owns about 40 million shares of the company on the list of 100 richest people in the world. Brian who is known for being low-key, made news last year for asking all company employees to steer clear of political discourse and focus on just work, a stance which has been widely criticized as insensitive and tone-deaf.

The world of tech is notorious for turning people into mega- billionaires, and Brian Armstrong is one of them. Common names on the list range from Amazon's Jeff Bezos, to Mark Zuckerberg of Facebook and Elon Musk of Tesla. New names include Eric Yuan, Zoom founder, who is now worth $16 billion since his company went public, and Snap's founder Evan Spiegel who is worth about $10 billion.

In a financial prospectus, Coinbase's CEO advised investors to be cautious, as the price of the company's success is heavily dependent on the price of cryptocurrency and the volume of transactions that occurs on the platform.