Coinbase Financial Model
On April 14, 2021, cryptocurrency exchange Coinbase reached a new milestone by getting itself listed on the Nasdaq Stock Exchange. Trading under the ticker “Coin”, the company did not opt for a standard initial public offeringInitial Public OfferingAn initial public offering (IPO) occurs when a private company makes its shares available to the general public for the first time. IPO is a means of raising capital for companies by allowing them to trade their shares on the stock exchange. (IPO). Instead, Coinbase’s shares were listed directly on the stock exchange at a reference price of $250.
Our experts have once again built an in-depth free IPO financial model for Coinbase. It is designed to help you grasp the mechanics with much simplicity and ease.
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Free Download – Coinbase Financial Model
We’ve built this FREE Coinbase Financial and Valuation Model that you can learn from and reverse-engineer to further your understanding of the IPO model. We have attempted to dissect the most important aspects of Coinbase’s direct listingDirect ListingDirect listing refers to the process by which privately held firms go public by selling their outstanding and existing shares to retail and institutional investors. Companies that want to list on stock exchanges do not need an underwriter, investment bank, or broker-dealer to help them through the procedure, and there are no lock-up periods.. As a result, you will learn –
- how to model a direct listing transaction,
- what an IPO model informs you about the company and,
- its possible valuation before and after going public.
Please feel free to download and customize it as needed.
Disclaimer: This Coinbase IPO Model is provided solely for educational purposes. Wallstreetmojo does not make any buy or sell recommendations to investors.
What Does the Coinbase Financial and Valuation Template Include?
- Index page for navigation
- 5-Year projections of Core Statements – Income StatementIncome StatementThe income statement is one of the company's financial reports that summarizes all of the company's revenues and expenses over time in order to determine the company's profit or loss and measure its business activity over time based on user requirements., Balance SheetBalance SheetA balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company., and Cash FlowsCash FlowsCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment.
- Essential Schedules: Revenue and Cost sheet, Working CapitalWorking CapitalWorking capital is the amount available to a company for day-to-day expenses. It's a measure of a company's liquidity, efficiency, and financial health, and it's calculated using a simple formula: "current assets (accounts receivables, cash, inventories of unfinished goods and raw materials) MINUS current liabilities (accounts payable, debt due in one year)", Shareholder’s Equity, etc.
- Detailed depreciation and amortization schedule
- Debt scheduleDebt ScheduleA debt schedule is the list of debts that the business owes, including term loans, debentures, cash credit, etc. Business organizations prepare this schedule to know the exact amount of the company's liability to others and manage its cash flows to prevent the financial crisis and enable better debt management. to analyze Financial Feasibility
- Detailed options value calculations
- Discounted Cash Flow AnalysisDiscounted Cash Flow AnalysisDiscounted cash flow analysis is a method of analyzing the present value of a company, investment, or cash flow by adjusting future cash flows to the time value of money. This analysis assesses the present fair value of assets, projects, or companies by taking into account many factors such as inflation, risk, and cost of capital, as well as analyzing the company's future performance. involving Coinbase IPO price prediction
- Relative Valuation
All of these concepts are explored in greater depth in our flagship Financial Modeling Courses.
Coinbase IPO Performance
Nasdaq had declared Coinbase’s pre-emptive reference IPO price at $250 per share. The excitement of cryptocurrencyCryptocurrencyCryptocurrency refers to a technology that acts as a medium for facilitating the conduct of different financial transactions which are safe and secure. It is one of the tradable digital forms of money, allowing the person to send or receive the money from the other party without any help of the third party service. and stock trading enthusiasts soon took over. While Coinbase’s stock opened at a commendable value of $381 on its trading debut, its share price soon touched $429.54. However, the closing value slumped to $328 on the first day. Thus, Coinbase secured an approximate valuation of $85 billion after the IPO.
Coinbase Inc is a licensed American cryptocurrency exchange platform, functional throughout the US, excluding Hawaii. It is one of the largest platforms in the US for trading digital currency. Designed in a user-friendly way, it also serves as a digital currency wallet. The company was co-founded by Brian Armstrong and Fred Ehrsam in 2012, with the mission to enhance economic freedom worldwide.
It primarily aimed at the accessible and valid exchange of Bitcoins. But today, it is widely used for secured trading of more than 50 different cryptocurrencies, including Litecoin and Ethereum.
The medium is suited for crypto beginners, investors, advanced traders, and businesses. It provides crypto buying, selling, investing, earning, storing, advanced trading, asset listing, accepting payments, and custodial services. It also brings interesting news from the world of digital currenciesDigital CurrenciesDigital currency is a currency found only in an electronic form as it is used for trading over the internet. They are famous for allowing transparent and secured digital payments. Although their popularity is constantly growing, their adoption as a reliable alternative to physical money is nowhere close. Some of the popular digital currencies are Ethereum, Bitcoin, and Litecoin..
Coinbase makes a profit from the sale and purchase of digital currencies, especially Bitcoin and Ethereum. Its earnings are tied to the ups and downs of Bitcoin prices. Earlier this year, when Bitcoin’s value shot up heavily, Coinbase estimated its first-quarter revenueRevenueRevenue is the amount of money that a business can earn in its normal course of business by selling its goods and services. In the case of the federal government, it refers to the total amount of income generated from taxes, which remains unfiltered from any deductions. at over $1.8 billion, stunningly overtaking 2020 figures by a huge margin. Many experts have suggested that the fluctuations in BitcoinBitcoinBitcoin is a digital currency that came into existence in January 2009, speculated to be created by Satoshi Nakamato, whose true identity is yet to be authenticated. It provides lower transaction fees than the traditional online payment systems, is controlled by the decentralized authority, and is not like government-issued currencies. price will affect the company’s stock price.
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