18 Apr 2022
Coinbase’s first year as a public company has been tumultuous
Coinbase is trading at all-time lows, down 62% from its open price, one year after its public listing.
The expectations ahead of the Coinbase listing were high. Coinbase opened at $380 on April 14th, 2021. Currently, Coinbase trade at $145, down 62% since its opening price in what has been a tumultuous first public year for the company.Overall, Coinbase's performance seems to closely follow the crypto market's performance. Coinbase went public during the peak of last year's spring boom and saw a strong recovery during the bull market last fall. In the last few months, Coinbase's performance has been poor, leading Coinbase to trade substantially below last year's summer lows.While Coinbase has struggled in the stock market, fundamental metrics remain strong. In Q4, Coinbase saw a net income of $840 million, or $3.32 per diluted share. Since its listing, Coinbase has also seen a sharp rise in the number of verified users, growing from 58 million to 89 million (Q4, 2021).Currently Coinbase trade an PE of 10.22, a conservative PE ratio compared to most of the tech sector.So, what explains Coinbase’s poor performance? The poor crypto market is one obvious explanation. While stronger competition within the crypto exchange sector possibly contributes in reducing Coinbase’s growth estimates.Additionally, investors now have access to other kinds of crypto exposure through traditional venues, such as mining companies and ETPs/ETFs. We’ve also seen excessive flows of private investments throughout the last year, possibly impacting Coinbase’s performance.