Ladies and gentlemen, let's talk about the coinbase ipo and in this video i want to give you an actual wall street level, analysis of the financials of the company of its future, a full dcf and my honest valuation about what this company should be valued at beyond The noise, beyond all the hype, a lot of noise, chirping on social media and youtube, a lot of people hyping it up or hating on it, but nobody is looking at the financial stuff. Now i want to give you a wall street level analysis of what i think this company should be valued at and again, i'm not a cryptocurrency expert, there's, probably much better people than me at cryptocurrency, but i know how to evaluate companies based on history based on Business models - and this is exactly what we're going to do in this video, no nonsense now before we get started a quick hello. If this is your first time here, my name is tom. I used to be a senior financial analyst.

Now i'm a full-time youtuber and i'm here to give you all the truth about the financial world, the stock market and economics, and in today's video we got to talk about the coin based ipo. The ticker is going to be coin, actually good, thicker. Now a lot of noise, a lot of hype and whenever there's a lot of hype you got ta, be careful. So, let's go through everything together now, first of all, you got ta remember that if this thing actually goes through at the valuations people are speaking about, this is pretty bonkers, because, just two weeks ago people were privately trading between themselves coinbase stock at about 67 billion Dollars now fast forward, two weeks to today, everybody's talking about the valuation of anywhere between 140 and 160 billion dollars, maybe even higher.

So when you see a valuation goes double in two weeks without anything fundamentally changing, not even the price of bitcoin could catch up with that. You got to be careful. That doesn't necessarily mean it's a bad thing, but you got to make sure that just is worth the squeeze and in this video that's exactly what we're going to do now. Coinbase, if it launches at 150 billion it's going to launch straight into the top 100 us companies on the stock exchange, which is insane it is pretty much unprecedented.

Now, here's the thing: let's talk about coinbase from a completely financial emotionless level, i'm a financial guy. Let's look at the financial summary of q1, which they posted then i'll, show you the full financials, the balance sheets, the profit and losses, and then i'll show you my dcf with my target price for this company now check this out. Coinbase announces first quarter. 2021 estimated results okay, so this is estimated, so you got to be careful with this, but it gives us a good indication of what the hell is going on.

Okay, so let's go through it. First of all, 56 million users, which is quite nice, aum of 223 billion 11.3 from the crypto asset market, which is nice. It's a really nice share. Now here's the thing total revenue of almost 2 billion.

That means they're on pace to make 8 billion in revenue. In a single year in 2021, which is a lot now check this out net income of 730 million to 800 million, now we're talking about a margin of net income, that's not even ebitda, which is one of the highest. I've ever seen. Ebitda 1.1 million very high margins if they can generate 1.1 billion dollars of ebitda per quarter.

This company is going to have a very hefty valuation, and i'm going to show you my dcf in a second, as you can see here, they have almost six billion dollars of actual assets. Out of those six billion, one billion is straight up cash, which is really important and not that they need runway, because they're actually seem to be profitable. But it's nice to have enough cash to do whatever it is. You need, and if you take a look at the liabilities, there is no debt and if you compare their assets to their liabilities, you're going to see that they have almost 6 billion in assets versus 4.3 in liabilities, meaning they are much more than just balance.

And even then, out of those 4.3 billion of liabilities, 3.8 are not real liabilities, because these are custodial funds. It means it's money they're holding for their clients. It's not something they're going to have to scramble to resolve if they need to repay a loan. As you can see here, most of it is probably not a real liability in the sense we're looking at so their balance sheet looks extremely healthy, which is quite refreshing because this is a fairly young company dealing in cryptocurrency.

So you wouldn't expect to see this nice pristine financial balance, but they got it now. I want you to see something really cool. These are the revenues, as you can see here: they're generated 1.1 billion in 2020, that's the whole year, so that's 2x versus 2019 and if you consider the 1.1 billion that they've generated according to what they're saying in q1 of 2021, we're looking at 4x from 2020 To 2021. so they doubled the revenue from 2019 to 2020 and now they're about to quadruple the revenue from 2020 to 2021.

now and allow a lot of people will say something about tulips here and energy and pollution, and all that holds true. However, as cryptocurrency keeps going up, this will do better whatever it is, you have to say about cryptocurrency, it's true. However, it seems that the right conditions of cryptocurrency to go up will only continue more institutions are getting into it. More rich people, more banks.

It gets a lot more mainstream media favorite attention. It's really seems like the prices of bitcoin are not going to come down drastically anytime soon, at least not to the level that we've seen in 2017 2018. We're probably not looking at another massive crash, all the way to three or four thousand dollars. I don't think that's ever going to happen again with the level of interest that people have in bitcoin right now, the scarcity effect and the fact that it's being used as one of the main ways to hedge yourself from inflation, which means the demand, is much bigger Than the supply, just economics now check this out so right here on the screen you're seeing a dcf which i've constructed for this company.

Of course, i still don't know exactly how many shares we're going to have, but i can give you the valuation of the company based on the numbers we've seen so far, so i've assumed at 20 annual growth from the 2021 numbers just 20. Nothing insane not the 2x, not the forex, that they did in the past two years, because if you think about it, they went from 500 million to what seems to be four billion dollars in revenues within the span of two and a half three years. So i haven't done that i've, given them a 20 growth rate and after the fifth year at four percent, perpetual growth rate at 10, discount rate 5 billion, which i think they'll have to invest in capex in infrastructure to be competitive over the next five years. So 5 billion goes back into the business and at 25 multiplier because it's definitely tech.

So for me, the valuation here is 180 billion dollars just based on these numbers. It would seem to me that if their numbers that are posted about 2021 q1 will actually hold true we're looking at a 180 billion dollar company, does it mean a company doesn't have risk? No, in fact, if you look through their prospectus, i'm going to put the link below there's literally 27 risk factors which the company itself have listed as far as regulation. As far as a lot of different things that you have to look into the price of bitcoin there's a whole lot of them, there's a lot of risk every time you're dealing with cryptocurrency when you're getting on the cryptocurrency bus. You got to make sure to understand.

It's going to be a bumpy ride by definition, so i'm not saying that this company will be worth 100 billion. I'm just saying that, based on their card numbers, this is the number i'm getting for my dcf. Now, of course, you got to make your decision. You got to decide for yourself if this is the right company for you.

But again, if you are a fan of bitcoin, if you believe in the path of bitcoin getting on this platform with how easy and accessible it would be for the general public to embrace bitcoin and with everything that's going on with bitcoin regulatory, wise and the fact That it's actually being adopted by mainstream media and mainstream banks. It would seem like a really interesting play, but again just my opinion, not financial advice, allegedly blah blah blah blah, as always a huge shout out to our channel members and our patrons. If you want to support us, the link is going to be below for you guys to join, we'll see you in the next video.