Coinbase Market Cap was listed incorrectly and all major news sources reported this bad data as fact.
Bear with me while I go a bit nerdy to explain how and why all these trusted sources got it so badly wrong. $25 billion difference is a big mistake.
This is NOT about the trading price per share. At market close on Friday it was $342. All financial sites reported that consistently.
I am not here prognosticating about how much Coinbase should be worth based on it’s business prospects, disruption blah blah. Plenty of people are doing that and I have no desire to add to that digital landfill.
How do we at Daily Fintech know this? Error messages from our Fintech 50 Index system smacked us in the face!
The data issue relates to the market cap, which you calculate by multiplying the trading price per share by the number of shares.
Well maybe not.
Look at market cap as quoted by everybody on the day Coinbase went public which was about $85 billion, based on Coinbase having 261.3 million shares. Nobody publicly questioned the 261.3 million shares number; the debate was all about what the trading price would be.
Here is a typical headline from the day:
A few days later as I write, Yahoo were showing the market cap at $61.93b, Google was showing the market cap at $65.52b and NASDAQ was showing $66.33b. Whichever number you pick that that is a massive difference from a few day earlier, without any public explanation of why the market cap crashed so much.
Did the trading price per share crash dramatically?
All major sites are showing the same trading price per share ($342 at end of trading day on Friday, $333 as I write).
The difference is simply the number of shares.
This leads to a mistake of over 25 unicorns!
A billion dollars here. A billion dollars there…
We discovered this story when Daily Fintech launched Fintech 50 Index on the day Coinbase went public. Fintech 50 Index is 50 publicly traded Fintech stocks selected by the Daily Fintech experts and ranked by market cap.
So figuring out market cap is important to our business (which is licensing Fintech 50 Index data and brand to companies who want to create a Fintech thematic ETF). Market cap matters to sophisticated buy side investors we service.
When Coinbase started trading on 14 April, our system showed the trading price correctly but showed market cap as zero. Huh? We suspecting a technical bug. The story is a much more interesting one about a big systemic bug that lost $25 billion.
IPO mistakes do happen, such as 2012 NASDAQ snafu on the Facebook IPO.
We are working with some people on the correct calculation of the number of Coinbase shares; in the meantime, we show what everybody was saying on April 14 which is based on 261.3 million shares. As soon as we get the correct number, you will see Coinbase ranked correctly among 49 other publicly traded Fintech stocks on the Fintech 50 Index.
Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.