We had another initial public offering this week, but with a new twist: It was a crypto IPO for Coinbase…
Coinbase, if you’re not familiar, is an online brokerage company just like Schwab, TD Ameritrade, Fidelity or any of the others. But instead of buying and selling stocks, you’re buying and selling crypto.
Coinbase (Nasdaq: COIN) has now been trading for a couple of days, hitting a high of $429.54 Wednesday with the low at $310, which is quite a range for one day of trading.
Typically, what I do is urge caution… a tremendous amount of caution when buying new IPOs — especially IPOs that are clearly over-hyped.
Back in May 2012, I was on CNBC with Maria Bartiromo when Facebook Inc. (Nasdaq: FB) had its IPO, and everyone was bullish…
Everyone but me. So why was I bearish?
I felt like Facebook had to figure out a way to monetize its audience before I could be bullish about the stock. And what happened? The stock imploded. By September 2012, the stock had fallen 60%… in just four months.
But then a year later, by late July 2013, I’m bullish on Facebook, now in the low-$30 range — and I was quoted in The Wall Street Journal. I was bullish at that point because Facebook figured out how to monetize its audience.
Today, Facebook is worth over $300 a share. Everyone knows about it. Many of you are holding it. So IPOs — especially the over-hyped ones — are generally a time for caution, not jumping in both feet first.
Check out my short video and let’s chat about why you should proceed with caution when entering a new IPO, and the Coinbase crypto IPO in particular.
And as always, please like and subscribe to our YouTube channel and podcast, “Smart Money Circle,” where I interview some of the most brilliant minds in the business. You can also follow me on Twitter, and read more of my thoughts on the market at WealthPress and on Forbes, where I’m also a contributor.
That’s how it was ALWAYS supposed to be.
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