I don't expect the Coinbase CEO to secretly leave the country with gold bars. But I do expect Coinbase to either go bankrupt or to face major lawsuits for years and to have very poor stock performance.
And yet I imagine people will be surprised when they find out that Coinbase insiders have only been selling (and have sold almost $4B worth of) their stocks every since the direct listing (not even IPO). [0] Chances are, Coinbase was more of your garden variety pump and dump where you hype your useless startup up, and dump it on retail at a hugely inflated "market price".
Q2 2021 is when it was listed, and when insiders bagged $3.9B. Compare that with the scale of $82M or $47M. After Q3 2021, crypto started crashing and so did COIN stock, so I imagine insiders who knew what's up and wanted to dump got out already.
They were sitting on large illiquid unrealized gains until the IPO. I can't imagine that's strange behavior in companies going public. Some funds will sell into the IPO as a rule in order to redeploy capital to other early stage investments. For early employees and founders who could have had up to 99% of their wealth tied up in Coinbase stock, some diversification is hardly odd.
Management selling is pretty typical. You'd have to dig into Coinbase specifically, but if a big part of your pay is stock/options, you will generally constantly sell a portion of that. Obviously, a big spike in management sales can be a red flag.
Crypto tokens have no fundamental value, but as long as people are interested in it, Coinbase has fundamental value offering a service to get money in and out without the apparent BS and scams. It crashed hard- I think coinbase is actually a good investment right now, a solid business with underpriced stock.
Edit: HOOD is probably a good buy too for the same reasons.
COIN and HOOD both have an opportunity to make major changes and become profitable businesses. But just looking at their cash/debt/stock comp/revenue growth/expenses, it doesn't look great.
I see what you're saying, but I remember reading on here months ago that Coinbase's debt was unimaginably huge. Doesn't matter if they have a good business selling shovels if they can't dig themselves out of the impossibly deep hole they're in.
Just looking at the stock perf. They have high trading fees and still lose quite a bit every quarter. They need to figure out their business plan when trading activity is lower, or figure out some way to drive trading activity.
I think they have an excellent chance of being the last one standing. Unless we learn that they have also been operating a scam. If all they do is run a reliable exchange and don't get hacked, as other exchanges fall they'll probably get more business.
But I think if public interest wanes, and crypto sort of becomes this amway for nerds thing, then they'll probably flounder unless they prune back their costs significantly.
I don't. Crypto traders will never learn. They'll continue to see that coinbase has high fees, low volume, and a limited set of coins and they'll continue to use scammy unregulated exchanges. When one dies they'll just switch to the next one. The majority of crypto volume will never be on a centralized US regulated exchange.
