Meeting all criteria and replacing Discover, Coinbase will join the S&P 500. The news immediately triggered an 8% surge in COIN’s after-hours trading, establishing Coinbase as a key player not only in Web3 but also in the traditional financial system.
Coinbase’s Success in Traditional Financial Markets
It’s fair to officially congratulate Coinbase, which is not only steadily expanding its presence in Web3 but has now secured a place at the heart of traditional finance. Before the opening bell on May 20, Coinbase will replace Discover Financial Services in the S&P 500, following Discover’s removal due to its acquisition by Capital One. But that’s not the only factor – inclusion in the S&P 500 requires meeting several criteria, such as posting positive net income in the most recent quarter and cumulative profitability over the past four quarters.
As you might have guessed, Coinbase met those requirements: the company reported a net income of $65.6M ($0.24 per share). Yes, that’s a steep drop compared to the same period last year ($1.18B, $4.40 per share), but the fact that it remained solidly profitable was enough to qualify.
Revenue also rose 24% year over year, reaching $2.03B compared to $1.64B previously. As of Monday’s market close, Coinbase stock was priced at $207.22, with a market capitalization of $53B. Again, that’s well below the all-time high of $357 reached in 2021, but the current valuation is more than sufficient for Coinbase to claim this win.
Unsurprisingly, the news had an immediate impact on its stock: COIN rose 8% during the extended trading session. However, it’s worth noting that the entire S&P 500 was rallying that Monday, gaining 3.3%, along with major tech stocks like Amazon, Apple, Nvidia, Tesla, and others.
Conclusion
There’s hardly any ambiguity here – this is a confident and symbolic victory for the recognition of a crypto-native company in traditional finance. It’s not the first, and likely not the last, such milestone we’ll see in the future.
