Does the listing of Coinbase promote the bull market with a P/E ratio above 300 times?

At the time when the cryptocurrency market fell sharply (BTC fell by more than 22% in 7 days), Coinbase submitted a listing application to the SEC. It will use a non-IPO direct listing method to land on the NASDAQ Global Select Market Composite (NQGS).

According to the Block, the Coinbase’s latest liquidation price reached US$373 per share in the Nasdaq Private Market (NPM), and the corresponding Coinbase valuation was 100 billion. According to the S-1 form, the Coinbase’s net profit was approximately US$322 million last year, corresponding to a P/E ratio about 300 times.

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Last year, the dynamic P/E ratio corresponding to the initial issue price of MY, which almost set the largest IPO of the year, was only nearly 100 times. That makes people worrying that it is the bubble of the science and technology innovation. Is this the strong tone of the bull market in the cryptocurrency market or the signal of peaking?

The Direct Public Offering (DPO) is a way of listing corresponding to IPO. The DPO does not need to raise funds when the company goes public. If the exchange agrees, its company’s stock can be directly circulated in the secondary market. In essence, the company’s shareholders go to the secondary market to resell the stock they hold.

The advantage of DPO is that the cost of listing is lower than IPO. Due to the lack of IPO process, it can avoid the possibility of lowering the IPO price in the pricing of investment banks when underwriting, thereby creating profits for investment bank customers.

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For the company, not conducting an IPO may mean that it does not lack funds.

However, nothing is absolute. The first company to use DPO was the streaming media giant, Spotify, which went public at a loss. It lost US$15.4 billion in three years from 2015 to 2017. It is still in a loss quagmire, and the latest financial report shows that Spotify’s revenue growth has slowed down, and the loss constantly expands, but the Spotify’s stock price has risen steadily.

Although Coinbase reported no losses in the year of listing, it turned losses into profits in the reporting year. It suffered from losses during periods of volatility in Bitcoin or crypto assets However, Coinbase believes that in each round of crypto cycles, the total market value of the market continues to grow, and even the bottom of the market is higher than the price of the previous round.

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Coinbase will become the crypto direction in the capital market. We believe that if Coinbase’s stock price performs well after listing, it is a good thing for the cryptocurrency world and may continue to stimulate the bull market.

Before Coinbase declared its listing, the purest blockchain concept stocks in the U.S. stocks were mining company stocks, but the listed mining machine stocks performed poorly in the financial reports, and even the top mining machine companies in the industry made a fortune on Coinbase in 2020 also recorded a loss. More importantly, the first two mining machine companies were listed in the bear market of cryptocurrency. Although it coincided with the bull market of U.S. stocks, it did not pursue the blockchain concept stocks at the time, so the IPO pricing of the two major mining machine companies is relatively ordinary, but mining has become more popular in the market. The NGK’s mining project has recently launched two new projects, namely SPC and VAST. They both use the NGK computing power for mining, which is one of the official directions this year. In addition to airdrops, there are also a series of computing power reward programs waiting for us!

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