Coinbase Just Doubled | Why it Might 5x FAST | Coinbase IPO.

well folks coinbase basically just

doubled its valuation

right before going public yes coinbase

just released

a quarter 1 20 21 earnings

or at least a current report which gives

us just a little overview a little

sample of what the earnings were because

they're not technically a public company

yet

though they will be going public on

april 14th

let's take a look though at what just

happened at coinbase because

when you think you want to invest in a

company and it basically just

doubled at least its earnings doubled

which implies its valuation is going to

at least double

you you kind of get a little nervous

because it's like

darn i wish i was buying this earlier

had the chance to buy it earlier

anyway coinbase in case you don't know

is obviously a massive cryptocurrency

play

it is an opportunity for people to buy

and sell cryptocurrency and folks here

are

some of their numbers so take a look at

this and this is what's pretty

ridiculous in fact just to make this a

little clearer

we're going to erase that and we will

bring that right back

so take a look here at the top in yellow

we have revenue in 2020 of 1.1

billion dollars revenue 1.1 billion

dollars the company's not in public yet

and they got over 1 billion dollars of

revenues for the entire year of

2020. in 2019 they had 482 million

dollars of revenue that means they more

than doubled

their revenue going from 2019 to 2020

and if we look at total revenue that's

true too when we include the other

revenue here

their net income was 322 million dollars

in 2020.

this means when you look at companies

like c3ai that aren't expected and this

is not a slam on c3 i'm just saying

when you look at companies like c3ai

that

when we project out to 2024 are still

losing money

docusign is still losing money and these

companies are trading

in massive valuations and then you come

over here to coinbase and you're like

wow okay cool yeah coinbase grade yeah

billion dollars in revenue 2020. okay

okay but how much money are they making

322 million dollars

that's like somewhere around a 27

net profit margin this is absolutely

insane this company is making money

hand over fist hand over fist look at

that

322 million dollars it's insane but

folks

what's really insane like when i first

started going through this

uh this annual this is their second

amendment here is sort of their uh

s-1 they're filing to go public and when

i started going through this and i was

looking at the different ways they make

money

i got really excited i'm like wow okay

they make a ton

of freaking money a lot of the money

they make uh

obviously comes from people buying and

selling selling cryptocurrency

seems like institutional investors

follow the retail investors plowing into

this

but we can really go into detail on the

rest of their s1

later those are some other annotations

i've made and i'm still reading through

the rest of their s1

but today we have a pretty newsy day

because we just got

updated numbers for quarter one now

that's important because see these

numbers right here are for the year

ended 2019 and 2020

but take a look what their estimate or

or currently

what they're expecting to show in their

final report for their q1 earnings

ready for this watch this revenue now to

keep in mind

this is 1.1 billion dollars for the year

we would expect that their quarterly

revenue might be like what

300 million dollars that would be growth

right let's say they were going to

double the one billion dollars and

they'd get to like

two billion dollars in revenue for the

year okay maybe we'd get

500 million dollars of revenue for

quarter one because it's just one fourth

of the year right

okay you ready for this i'm gonna press

undo and when i press undo

it's gonna show you how much money they

made in just the first quarter

of 2021 ready here we go boom 1.8

billion dollars in just the first

quarter

if we annualize that which you probably

shouldn't do because the first quarter

was really hot for crypto

if we annualized that that would work

out to

7.2 billion dollars of total revenue if

we annualize that just by multiplying by

four

which is almost 7x more than 6x

what they had in 2020. that's insane

that's not doubling

that's literally like 5 to 6 to 7

xing it's absolutely insane how much

money this company is making

now they did disclose that even though

their revenue

is exploding by that amount their net

income

would be somewhere around let's do the

quick math here really quick

so 730 on the low side 730 million

dollars so we just go to a calculator

730 divided by

1800 that's a margin oh my gosh it's

getting better

that's margin of about 40.5 percent

on the low end of what they're expecting

in fact if we go over to the 8k

here we could see the range 730 million

to 800 million

gee whiz that means we could be at 40

margin net margin not gross margin

net going to the bottom line or

potentially as much as 800 divided by

1800

44 margin this company is making an

insane amount of money

i think this is going to rise the sea of

really all crypto related companies

like uh for example coin or not coinbase

voyager voyager digital they do

they're a very small version kind of

coinbase except they also pay you

interest on your cryptocurrency

you could sign up and try their account

out if you want go to mckevin.com

voyager it's kind of like a block fine

mckevin dot com slash block five bf

sorry medkit.com bf to get up to 250 for

free those are two

competitors for purchasing

cryptocurrency but they offer you crypto

or a lot of interest on your deposits

there coinbase is just starting to get

into that

uh but anywho they're making money hand

over fist here this is going to rise the

sea level for all of these

cryptocurrency companies

i think a danger is though extrapolating

this for the year because we've just had

cryptocurrency double in the last you

know

well certainly bitcoin and a lot of

other cryptocurrencies we've had them

double in the last three to four months

here so of course there's going to be a

lot of trading volume

but i have to say these numbers are

insane 40 to 44

margin it's crazy now they are planning

on increasing their annual marketing

expense

see previously they were spending about

56 million dollars

on sales and marketing which as a

percentage of revenue 56 divided by

12.77

uh was really only about four percent

they're planning on basically

three to four xing how much money they

spend on marketing

because they're making so much money

they're like hey we may as well just

funnel this money back into the business

and try to advertise like crazy

so in other words they're gonna try to

keep this momentum going

this company is absolutely mind-blowing

with how much money they make

this ipo is going to be explosive so

previously and privately we know that

this company was selling for roughly

around 320

per share which if we take a diluted

earnings per share of 1.4

that prices this company at somewhere

around 228

times 2020 revenues but since quarter

one is so explosive with a net for the

quarter

of say 730 uh million dollars this is

insane

which is more than double their previous

eps i mean their eps is going to be

more than uh you know double here would

be about three their eps is probably

going to be more than about 325.

uh that's just for the quarter their

years eps will be a little different but

if we just took for example

just a quarter and assumed that was the

whole year

their value per share could go to

somewhere at the same multiple

somewhere like 741 dollars per share

so i wouldn't be surprised if this

company

uh i mean first of all i expect it to

skyrocket

on uh on direct listing day but i

i mean golly with the price that this

we don't know yet what the share price

is going to be but with these earnings

they could justify a really fat price

i mean even if we thought they were

going to make two dollars in the future

two dollars per quarter

times four would be eight dollars for

the year

eight dollars and then assume they got a

hundred fifty times multiple because

they're going to advertise like crazy or

whatever

that makes this a twelve hundred dollar

stock

that's crazy but it's entirely possible

and now i wouldn't be surprised if after

they direct lists they end up doing a

stock split like a 10-1

stock split that's what i would do get

that share price

from like uh twelve hundred dollars to

120

10x the amount of shares outstanding

right now we've got around 91

million shares outstanding so just 10x

that

uh from 91 million and go to you know

910

million basically uh and and then

that'll

bring our share price down but that'll

also make it feel more affordable to

folks and we could see like a tesla

style rally after a stock split

which we had when tesla did their five

to one split

so really there's there's not a lot not

to like at coinbase i think the biggest

danger

is extrapolating forward these insane q1

numbers

this is absolutely mind-blowing but

you know more and more we are seeing

crypto adoption

just go through the roof uh it's it's

really incredible i mean some of their

user metrics too

they had a 43 million verified users in

q4

take a look at what their 8k says now

their 8k shows they've gone up to

56 million which if we jump over here

56 million that's almost like uh

half more yeah it is almost almost like

half more

i mean 56 million that kind of feels

like it belongs somewhere over here

56 mil like if i were to draw this like

a horrible chart here right

uh and maybe we we make it blue kind of

like theirs there we go

ah there we go see we know what we're

doing there we go

uh actually it could potentially even be

a little bit higher like if we tried to

draw this to scale

it's it's crazy like this balloon right

here

is i don't think sustainable this i

think is sustainable

uh and then they're gonna advertise from

four percent to maybe

14 to 15 percent of their revenues uh

that's that'll that'll be really really

interesting we'll see

we shall see but i'm very optimistic

about the coinbase ipo i have to say

i've been a little slow with putting

together this

uh just sort of a deep dive on their s1

because it's hundreds of pages long

but make sure to subscribe for more

coinbase information because i'm gonna

be going through

everything i can find on coinbase

because uh this is uh this is exciting

to me

part of me is worried like okay am i

gonna buy investing in hype

or am i just investing in a really

profitable company that when that stock

split comes in the future it's just

gonna be like 10 days even if the stock

split doesn't come they're gonna start

advertising it's gonna be

attendees we'll see anywho these are

just some initial thoughts initial

reactions

very very impressed so far with what i'm

seeing from coinbase and i don't think

anybody

uh can't be impressed here anywho thanks

so much for watching consider

subscribing and folks we'll see in the

next video

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