2 Years After Its IPO, Is Coinbase Stock Wildly Undervalued?
On April 14, crypto investors will have an opportunity to celebrate the two-year anniversary of the Coinbase Global (NASDAQ: COIN) initial public offering (IPO). When Coinbase went public in 2021, it was easily one of the most-hyped moments in the crypto industry, which was already in the midst of one of its biggest booms ever. Since then, however, the path forward has been challenging, to say the least. Coinbase is now trading at about $62, a stunning decline from the company's IPO price of $381.
It's easy to dismiss Coinbase as being overvalued and overhyped, but there are a lot of very smart investors out there -- including Cathie Wood of Ark Invest -- who continue to accumulate Coinbase at a prodigious pace. If you're willing to take a contrarian approach and rethink some of your earlier assumptions, Coinbase stock might actually be undervalued.
Back in April 2021, analysts assumed that retail investors were the key to Coinbase's future. After all, many of the biggest Wall Street banks were still dismissive of crypto, and it looked like mainstream institutional investors were never going to come around to the idea that crypto might actually be an asset class worth investing in. As a result, it seemed appropriate to value Coinbase according to metrics such as monthly active users and monthly trading volume. The more investors using the platform, the more profitable Coinbase becomes, and the higher it should be valued, right?
Source Fool.com
