Nick Hodge,
Publisher
March 24, 2021
Coinbase and Reddit are going public.
Well, Coinbase is for sure. Reddit is a definite maybe.
There's a lot of speculative assets out there.
Let's take Coinbase first.
In years past, if you wanted to buy Bitcoin, you had to actually buy Bitcoin. You had to open up a wallet somewhere, probably Coinbase, or you had to find some other way to buy a company that owned or mined Bitcoin.
Because, at least so far, there have been no Bitcoin or crypto exchange traded funds (ETFs) approved by the SEC.
So if you wanted indirect exposure... you had to buy something like Microstrategy (NASDAQ: MSTR) or the Grayscale Bitcoin Trust (OTC: GBTC). Or you were looking at some OTC or Canadian listed miner. Or an iced tea company that changed itself into a blockchain company.
Now, all this stuff is coming full circle.
With a recent valuation of $68 billion, Coinbase is set to IPO in April 2021. That valuation is some thirteen times higher than the value its private stock was fetching just last year. But then again, Bitcoin is up ten times in the past year, too.
That valuation makes Coinbase larger than Intercontinental Exchange Inc, which owns the New York Stock Exchange.
With little alternatives available, and a clear crypto-mania underway, Coinbase’s valuation — at $68 billion — is more a subjective reflection of Bitcoin’s future than an objective metric. That valuation is nearly 53 times 2020 revenue.
But when the stimmies are flowing like the salmon of Capistrano, who am I to judge value?
Now you can just own the thing where all the Bitcoins are. And I can just hear the Portnoy lackeys now: “That good. Me buy.”
With the timeline now extended to April for a direct listing pending SEC review, I think you're going to see a lot of fanfare around this Coinbase IPO in the next few weeks.
And the same thing with Reddit. Thinking back over the past couple of months, you have all these Redditors, the AMC, GameStop. And then the silver squeeze that wasn’t, of course.
But why do we need WallStreetBets to tell us what to buy? I mean, Reddit can just IPO and we can all buy that.
And that seems to be the direction things are heading.
Earlier this month Reddit hired its first Chief Financial Officer, which the New York Times called “a move toward tidying up the company’s books before an eventual public offering of its stock.” It raised $250 million in February at a $6 billion valuation.
When I think about end games... and when I think about how this bubble ends... and when I think about the snake eating its tail...
And when I think about things that have symbolism... I think Coinbase going public and Reddit taking the steps to go public are, if nothing else, further indications of the bubble that we're currently in.
I think people will buy this Coinbase IPO.
I think that $1,400 checks are on the way, if they haven't hit already.
There's a lot of leniency out there. There's a lot of money out there. There's a lot of froth out there.
And it could go on for longer.
Just wait until they NFT the tweet announcing Reddit is going public and auction it off to the highest Bitcoin bidder.
Call it like you see it,
Nick Hodge
Editor, Daily Profit Cycle
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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