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Coinbase stock lost over 75% value

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Re: Coinbase stock lost over 75% value

#361

Post by gorgoiler »

pushrax wrote: post #283
gorgoiler wrote: post #261

Earlier quoted context omitted.

Cloudflare’s value, as a business, is in their crack team of amazing neteng talent. All these employees could just leave if they wanted to. If you are a public company and your worth is so heavily dependent on talent, how do you mitigate that risk? Is there a future for football player style contracts for engineers, where you are tied in to a team for N years, and with a requirement that another team has to pay big m…

> football player style contracts for engineers, where you are tied in to a team for N years, and with a requirement that another team has to pay big money for your contract if they want you to transfer? i.e. golden handcuff equity grants with vesting schedules? Top performers in highly demanded areas can have some or all of their remaining equity bought out. It definitely ties the value of the contract to the stock…

That’s different. You are talking about doing a deal with the player.

I’m talking about Company X having to pay off Cloudflare-the-business if they want Team Cloudflare’s top network engineer to transfer to Team Company X, mid contract.

Re: Coinbase stock lost over 75% value

#362

Post by claytonjy »

nostrademons wrote: post #359
claytonjy wrote: post #198

Earlier quoted context omitted.

maybe not yet, unless a super early company, since no one is worth the round they raised in the last 6mo, which is what determines the strike price you'll get today. You're either looking for a down round, or a company that hasn't gone up yet.

Or a public company that took it in the chin over the last 4 months. With public companies you get the market price at the first board meeting after hiring, and you don't take quite as much risk of your stock being totally worthless as you would with a down round or unknown company.

is it still called a "strike price" when dealing with RSUs?

I agree with you but I took parent to imply startups & options

Re: Coinbase stock lost over 75% value

#363

Post by nradov »

gorgoiler wrote: post #261
ferdowsi wrote: post #11

Cloudflare is down 71% in that same period. Zoom is down 60%. Speculative pandemic tech darlings are no longer darlings and are being hammered across the board. It's going to be a rough time for anyone who had high hopes for their equity compensation.

Cloudflare’s value, as a business, is in their crack team of amazing neteng talent. All these employees could just leave if they wanted to. If you are a public company and your worth is so heavily dependent on talent, how do you mitigate that risk? Is there a future for football player style contracts for engineers, where you are tied in to a team for N years, and with a requirement that another team has to pay big m…

There are only about 1700 NFL players total at any given time. Most of those guys have amazing natural talent, honed by 10+ years of intense training that would crush most of us.

Network engineers are comparatively far more expendable and easily replaceable. It's not nearly as hard to learn as NFL level football.

Re: Coinbase stock lost over 75% value

#364

Post by dillondoyle »

thematrixturtle wrote: post #152
bfz wrote: post #139

Earlier quoted context omitted.

It warms my heart to think I could still be graded on language use so late in life. How would you describe it?

It's a bit awkward since "poisonous" usually refers to things you eat, and sandboxes or their contents are generally not eaten. If you want to continue the sandbox metaphor, which I do like, "playing in the Fed's sandbox until the bottom fell out" might work. Or even "toxic sandbox".

how about kid in hospital after tasting sand from sandbox poisoned with the Fed's rat droppings

Re: Coinbase stock lost over 75% value

#365

Post by gorgoiler »

nradov wrote: post #363
gorgoiler wrote: post #261

Earlier quoted context omitted.

Cloudflare’s value, as a business, is in their crack team of amazing neteng talent. All these employees could just leave if they wanted to. If you are a public company and your worth is so heavily dependent on talent, how do you mitigate that risk? Is there a future for football player style contracts for engineers, where you are tied in to a team for N years, and with a requirement that another team has to pay big m…

There are only about 1700 NFL players total at any given time. Most of those guys have amazing natural talent, honed by 10+ years of intense training that would crush most of us. Network engineers are comparatively far more expendable and easily replaceable. It's not nearly as hard to learn as NFL level football.

Maybe. The best engineers are also naturally talented. It is a fact that to be a good engineer you need to be very smart. You can get by with just a CS degree and a Cisco certificate, but you won’t be a game changer.

How many Principle Engineers are there at the FAANGs? How important are they to the business, and how long did it take them to get to that level, in their careers?

Re: Coinbase stock lost over 75% value

#366

Post by closeparen »

bradlys wrote: post #319
closeparen wrote: post #287

Earlier quoted context omitted.

It works if you live by yourself in a 1BR. To pay the mortgage on a family home you probably need to sell RSUs. It is also super risky to to buy a house you need RSUs to hold on to - exactly the kind of risk that is unreasonable if you have a family.

Most people in SV do this. So, it’s pretty normal actually.

Then there's going to be a lot of foreclosures soon.

Re: Coinbase stock lost over 75% value

#367

Post by toomuchtodo »

jjfoooo6 wrote: post #336
toomuchtodo wrote: post #153

Earlier quoted context omitted.

> Affirm A credit firm whose customer base is primarily folks who have to finance their small ticket item purchases in order to afford them is going to have a tough time in a rising interest rate environment. Their margins will compress as their cost of capital rises, and their default rate will rise as their borrowers slowly approach insolvency in a recessionary environment. I would be cautious about investing in an…

> borrowers slowly approach insolvency These are 4 week loans, exposure to any given customer is small. And in a recession demand for these loans will increase.

Their loan terms are typically 3, 6, 9, or 12 months. They’re not profitable and had $379 million in operating losses last year. Whether consumers ramp their demand for this product, which the data shows is overwhelmingly utilized for discretionary purchases such as fast fashion and their accessories, electronics, and digital goods, remains to be seen.

> 43% of Gen Z users have missed at least one payment, according to a survey by the polling site Piplsay. Of Gen Z consumers who used a point-of-sale loan for something they needed, 30% missed at least two payments, according to a survey by Credit Karma.

https://helpcenter.affirm.com/s/article/term-lengths

https://investors.affirm.com/news-releases/news-release-deta...

https://www.sfgate.com/news/article/influencers-lead-Gen-Z-i...

Re: Coinbase stock lost over 75% value

#368

Post by nostrademons »

bb88 wrote: post #334
devoutsalsa wrote: post #248

Earlier quoted context omitted.

> i don't see why anyone would want to buy coinbase stock. Because their growth trajectory is insane. They are making a ridiculous amount of money & will be around for a long time. The real question is how MUCH should you pay for the stock? It's worth something, but I haven't tried to value it & I have no idea what it's worth. More than zero, less than infinity.

> but I haven't tried to value it & I have no idea what it's worth. More than zero, less than infinity. Thankfully a lot of people do know how to price the value of a stock. A good number to target is a P/E ratio of 30 for a tech stock in growth mode. Tomorrow COIN releases their earnings report. EPS is expected to be 0.17% of the share price. So I would expect the blood bath to continue on COIN stock. If I had money…

That's a really rough valuation heuristic that can lead you very far askew.

A P/E of 30 is appropriate for a value stock (steady earnings) at 3% interest rates. (How did I get that figure? P/E of 30 is about a 3% earnings yield, and if earnings are steady the stock is effectively equivalent to a bond at that rate.)

For a growth stock, you have to ask yourself "How much growth do I believe is left in this market?" A company that's growing at 20% annually but has only a year left before it plateaus (like FB or NFLX last year) should trade at about a 20% premium; that'd imply a P/E of 35. But a company that's growing at 20% annually and has a decade of growth left (like FB at IPO) should trade at about 6x that original multiple, for a P/E of 180. An earnings yield of 0.17% implies a P/E of about 600, which implies that earnings should grow 20x before the company reaches a steady state. That's a little high but not totally out of the ballpark for Coinbase (earnings: $3B, market cap $21B) if you assume its comps are companies like Bank of America (earnings: $32B, market cap $293B) or J.P. Morgan Chase (earnings: $48B, market cap $363B).

Also note the effect of interest rates on valuation. At 10% rates, a value stock should have a P/E of about 10. For a growth stock, the effect is much more pronounced, because in the decade that it takes for the company to start raking in serious cash, that bond will be worth 2.6x as much and the company's long-term earnings need to be discounted accordingly, on top of the lower steady-state P/E. That's the real reason why tech growth stocks shot up so high after the pandemic and now have crashed so hard. With higher rates, large cash flows in the future are worth relatively less because you can earn more with safe investments now.

Re: Coinbase stock lost over 75% value

#369

Post by hardwaresofton »

Johnny555 wrote: post #344
hardwaresofton wrote: post #317

Earlier quoted context omitted.

So I'm actually in on PTON right now and feeling some pain, but what made it click for me was that the bike was completely unusable without a subscription. At this point, returns and people just burning/destroying their Pelotons are the only risk. In addition two things made me think about it: - The kind of people who buy pelotons are usually not the people who worry about that amount of monthly charge and may keep i…

what made it click for me was that the bike was completely unusable without a subscription That's why I went with a Keiser bike instead of Peloton, it was the same price for the bike, but no subscription needed, and I can easily use it with any spinning app. Plus I didn't like having a big expensive display on the bike, the Keiser has a simple 4 line LCD display. I like the Peloton instructors, so I subscribe to the…

Thanks for sharing, this makes a lot of sense, it looks like peloton has another win in the interior department but clearly less of a moat in the hardware department.

I think you’re more of a power user (and willing to tolerate set up pain) than most of the customer base would be, but how easily you’ve found a solution and competitor that works well with your method has been eye opening

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