#82 - The First Billionaire Creator, the Coinbase S-1, and 2 Popular Stocks With $0 in Revs
In this week's episode of Reformed Millennials, Broc and Joel talk about Coinbase going public and what this means to crypto, the 5 things Joel is watching to gauge the direction of this market and they discuss the creator toolbelt. As always, the back half of this episode is well worth your time if you care about building your own business.
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5 Things To Watch In Public Markets:
Risk Free Rate - The higher the 10 year treasury goes. The lower high flying tech stocks will go
Commodity Super Cycle - Oil, Copper, Lumber and Gas. The inflation trade is on and its a bet on a booming reopening
German Stock Index - German Stock Market breaking out to all time highs. Germany is the most important market in Europe. As Germany goes, so goes INT stocks. Right now its breaking out to all time highs.
Vaccines - Nothing is more important than the roll out of vaccine programs in North America and Europe. Just thinking of how impossible it seemed a year ago that we'd have one, let alone multiple, safe and effective covid-19 vaccines in arms in early 2021. Science is a wonderful thing. Reading that we might also have advanced the fight against malaria is the cherry on top.
US financials. $XLF, Goldman Sachs, JP Morgan and Citi are breaking out above their 2008 highs. FINALLY
I think were just getting started from a bull market perspective. But this doesn’t mean that rising rates and a redefined steepening yield curve wont have an impact on pockets of this market. - JS
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💵Coinbase Files to Go Public💡
Cryptocurrency exchange Coinbase was valued at just over $100 billion.
Why it matters: Coinbase could go public at a higher initial valuation than any other U.S. tech company since Facebook.
By the numbers: Coinbase generated $141 million of net income on $691 million in revenue for the first nine months of 2020, according to documents shared with investors.
The company disclosed a $30 million net loss on $530 million in revenue for full-year 2019.
None of these revenue numbers include 2021, during which the price and trading volume of Bitcoin has skyrocketed.
Share sale: Coinbase last month launched a secondary share sale via Nasdaq Private Markets (f.k.a. Second Market), offering up to 1.8 million shares in weekly batches.
The goal was to help Coinbase determine a reference price for its public offering, which will be done via direct listing instead of IPO.
The initial batch of 75,000 shares was sold on Jan. 29 at $200 per share. That worked out to a valuation of nearly $54 billion, compared to the $8 billion valuation Coinbase received during its prior venture capital round in late 2018.
The next two batches were sold at $301 and $303, respectively.
The most recent batch of 127,000 shares was sold Friday at $373, which works out to a valuation of $100.23 billion.
It's unclear if the secondary share sale is still useful to Coinbase for the purpose of determining a reference point for direct listing, given the upward surge. - JS
🧰The Creator Toolkit🛠
Away from the splashy headlines of NFT sales, new tools mean new opportunities for millions of people.
Many of the companies powering the ‘Creator Economy’ receivng the most attention are purpose-built for a specific medium, think newsletter or podcast, the Creator Economy equivalent of Vertical SaaS.
Companies that support creation or monetization:
Descript is for audio and video editing.
Stripe is for payments.
Stir lets creators manage their finances and collaborations.
These companies focus on helping creators create, grow, manage, and monetize their audiences. That’s incredibly important. A Solo builders’ main weapon is their ability to build relationships at scale and distribute their products.
But it’s also just the beginning. Ben Thompson has said that media companies are the first to adapt to a new paradigm shift because of the relative simplicity of their products. They require very little coordination among parties, just the ability to capture and distribute one person’s thoughts, images, or dance moves.
From a creator perspective, if you do any sort of video or podcast editing, Descript is phenomenal. It can automatically remove any filler words, word gaps, even overdub words in your own voice if you misspeak. - BP
⚠️Quick warning to people that own the following stonks⚠️
$NKLA - Nikola Corporation
Another blowout quarter for Nikola: $0 in revenue and $147 million net loss. Shares outstanding continue to rise (+44% YoY). Market Cap: $8 billion.
$SPCE - Virgin Galactic
$0 in revenue and $74 million net loss. Shares outstanding continue to rise (+22% YoY). Market Cap: $10 billion.
$PLUG - Plug Power
$316 million in revenue and $476 million net loss. Shares outstanding up 63% in the past year. Stock is up 800% over the last year to a market cap of $24 billion.
🌊Best Links of The Week☔
At 93, She Waged War on JPMorgan—and Her Own Grandsons - Incredible story of Beverly Schottenstein who, upon realizing her financial assets were being mismanaged, took her grandsons and their employer to arbitration — and won. “They made a lot of money on me, those kids—a lot of money,” Beverley said in an interview before the ruling. “They had no right going that far with JPMorgan. JPMorgan had to stop them, but JPMorgan was doing pretty good also.”
The Point of No Return - Chris Bloomstran pens another epic annual letter — this one comes in at just under 120 pages. It’s a master class on various topics including Disney, SPACs, macroeconomics, Berkshire Hathaway and more. Must-read for budding and seasoned investors alike.
When Everyone is A Genius - The end of a speculative boom can be inevitable but not predictable. Unsustainable things can last a long time. Identifying something that can’t go on forever doesn’t mean that thing can’t keep going for years. Years and years and years.
Money managers who grow up rich underperform those who grow up poor. One way to read these results is that these traits—testosterone, fast driving, wealthy childhood—are bad for managing money. Perhaps they correlate with taking foolish risks
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