Dogecoin’s $50 billion valuation now makes it bigger than these 10 well-known companies

NYSE trader

Dogecoin, a meme-inspired cryptocurrency that was started as a joke in 2013, is now worth $50 billion after a gravity-defying year-to-date rally of 7,199%.

The rally was sparked by a series of tweets from Elon Musk earlier this year, as well as from Snoop Dogg, Gene Simmons, and Guy Fieri. An overall increase in demand for crypto among investors following bitcoin’s surge to more than $60,000 and the direct listing of crypto-exchange platform Coinbase likely also helped support the continued rally in dogecoin.

Even some congressman are getting in on the dogecoin craze, with house member Mark Green disclosing that he purchased the cryptocurrency earlier this month.

Dogecoin differs from bitcoin in that there is no hard limit on the total supply of coins. Bitcoin has a fixed supply of about 21 million coins, of which not all have been mined yet. Dogecoin on the other hand has more than 129 billion coins outstanding, with 5 billion in new coins hitting the supply every year.

Even the founder of dogecoin, Billy Markus, can’t make sense of the surge in the coin he started as a joke. Markus told The Wall Street Journal in February, “The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325, it doesn’t make sense.”

Markus sold all of his dogecoins in 2015 and used the proceeds to purchase a Honda Civic, as even he couldn’t foresee the outsized influence a shiba dog would have on people’s investment decisions.

Dogecoin’s unlimited supply and the bewilderment of its founder hasn’t stopped investors from piling into the meme token, making it now more valuable than these 10 well-known companies.

1. Ross Stores

Ticker: ROST
Market Cap: $46.0 billion

ross store
Ross Stores.

2. Walgreens Boots Alliance

Ticker: WBA
Market Cap: $46.4 billion

FILE - In this June 25, 2019, file photo signage hangs outside a Walgreens pharmacy in downtown Cincinnati. Walgreens reports financial results on Wednesday, Jan. 8, 2020. (AP Photo/John Minchillo, File)
FILE – In this June 25, 2019, file photo signage hangs outside a Walgreens pharmacy in downtown Cincinnati. Walgreens reports financial results on Wednesday, Jan. 8, 2020. (AP Photo/John Minchillo, File)

3. Las Vegas Sands

Ticker: LVS
Market Cap: $46.8 billion

The Venetian Resort Hotel and Casino signage in Las Vegas, Nevada on September 9, 2017.
The Venetian Resort Hotel and Casino signage in Las Vegas, Nevada on September 9, 2017.

4. Kimberly-Clark

Ticker: KMB
Market Cap: $47.0 billion

toilet paper
The toilet paper fully stocked at a supermarket during the corona virus pandemic.

5. CrowdStrike

Ticker: CRWD
Market Cap: $47.7 billion

Crowdstrike logo
The logo of cybersecurity firm CrowdStrike.

6. Ford

Ticker: F
Market Cap: $48.0 billion

ford factory
Workers build Ford F-150 trucks at one of the automaker’s assembly plants.

7. Carvana

Ticker: CVNA
Market Cap: $48.5 billion

Carvana vending machine
A Carvana automobile vending machine.

8. Marriott

Ticker: MAR
Market Cap: $48.6 billion

ritz carlton miami beach
The Ritz-Carlton in Miami Beach, Florida.

9. Doordash

Ticker: DASH
Market Cap: $48.7 billion

doordash delivery driver
A delivery person for Doordash rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., November 13, 2020.

10. Roku

Ticker: ROKU
Market Cap: $49.9 billion

GettyImages 1204852519
Roku hits 50 million active accounts.

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Coinbase is officially worth more than GM, FedEx, and Twitter after its market debut

brian armstrong coinbase
Coinbase CEO Brian Armstrong.

  • Coinbase’s market value peaked at $112 billion during its first day of trading.
  • The crypto exchange was valued higher than Target or Airbnb at that point.
  • Coinbase is still worth more than General Motors, Twitter, or Chipotle.
  • See more stories on Insider’s business page.

Coinbase‘s market capitalization soared as high as $112 billion during its trading debut on Wednesday, valuing the business more highly than some of America’s biggest and best-known companies.

At its intraday peak, the 9-year-old cryptocurrency exchange was briefly worth more than Lockheed Martin ($108 billion), Airbnb ($106 billion), or Target ($103 billion). Even after paring its gains and ending the day with a $86 billion market cap, it beat out General Motors ($84 billion), FedEx ($76 billion), and Twitter ($56 billion).

Moreover, Coinbase is currently worth more than twice as much as Chipotle ($43 billion), eBay ($43 billion), Hilton ($35 billion), or Electronic Arts ($41 billion).

Coinbase’s market value is notable because it generated only $322 million of net income in 2020, a fraction of Lockheed’s $6.9 billion or GM’s $6.4 billion in profits last year. However, its backers are betting it will grow into its valuation by cashing in on the crypto boom and expanding its operations.

The company is certainly growing quickly. It earned up to $800 million in net income in the first quarter alone, or more than double its profits for the whole of last year. The group also reported 6.1 million monthly transacting users and $335 billion of trading volume in the period.

Coinbase went public on the Nasdaq index via a direct listing, making it the biggest company yet to take that route to market. Direct listings spare companies from issuing new shares and diluting their investors. They also allow existing shareholders to cash in their stock and avoid the usual six-month lockup period.

Read more: Bitcoin is a headache to store, and that’s created an investment opportunity that could theoretically pay determined traders big risk-free returns by December

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How market value can help you determine the true worth of company or asset

GettyImages 1160172463
A company’s market value is useful in eliminating the uncertainty behind what an asset is worth.

  • Market value is the value of an asset or company in the marketplace, according to what investors are willing to pay for it.
  • Investors use market value to analyze investment opportunities.
  • Market value is used interchangeably with market capitalization, but it is a more complex measurement based on a range of factors.
  • Visit Business Insider’s Investing Reference library for more stories.

Evaluating where a business stands in relation to its competitors and industry is a key step in deciding whether a stock is worth your investment.

Market value, or the value of a security in the eyes of the market, is one of the many metrics investors use to evaluate a company’s worth.

Most often used in tandem with book value, market value gives individuals a look at the bigger picture. If you’re looking for leg up to spot the right investing opportunities, understanding all the factors that comprise an asset’s market value is a must.

What is market value?

Market value, sometimes called open market valuation, is the value of a company’s stock in the marketplace. The metric is influenced by how investors view a company’s potential.

Market value is about a “company’s overall actual value” and factors in things like “how profitable the company is, how much debt it may have, and even the financial health of the sector of the economy it is in,” says Bobbi Rebell, Certified Financial Planner.

A company’s market value is useful in eliminating the uncertainty behind what an asset is worth. Buyers and sellers don’t always agree on a value of a product, and each side has different goals, with buyers hoping to pay less and sellers hoping to charge more. Market value provides a fair estimation of the value or worth of any given asset.

What factors impact market value?

Market value is a dynamic measurement that fluctuates considerably with time and takes numerous factors into account, such as: long-term growth potential, supply and demand of a business’s shares, and valuation ratios used to evaluate whether a stock is overpriced, underpriced, or priced fairly.

The most common market value ratios used to evaluate a company’s stock include:

  • Earnings per share: Because a higher earnings per share indicates a more profitable business, this metric can positively (or negatively) influence how investors view a company’s worth.
  • Book value per share: This number is found by dividing a company’s equity by total outstanding shares. Higher book values tend to mean that a stock is undervalued, and can therefore impact how the asset or company is perceived by the market.
  • Price-to-earnings ratio (P/E ratio): This ratio is the current price of a stock divided by its earnings per share. A high P/E ratio indicates that a stock’s price is high relative to its earnings and may be overvalued by the market.

Market values exist within a wide range, with smaller, more niche companies or industries valued considerably below their better-known, billion-dollar counterparts. The higher a company’s estimated worth, the greater its market value.

Calculating market value

Since it is determined by various metrics, there isn’t a single formula used to calculate market value.

If you’re looking for a quick way to calculate market value, you may be thinking of market capitalization, a similar, but wholly different metric used to determine a company’s financial standing.

For private companies that don’t publicly disclose its financials, it can be harder to assess market value. It’s typically done by comparing a private business’s value to publicly-traded ones in the same industry with similar sizes and growth rates, and calculating relevant ratios to contextualize its performance.

Market value vs. book value

When assessing whether an asset is appropriately valued, market value is typically analyzed side-by-side with book value. Book value is basically the value of a company according to its books, or balance sheet.

To get a company’s book value, you take the difference between a company’s total assets and total liabilities. Learn more about the difference between market value and book value.

Book value takes a little more work to calculate than market value. A stock is generally considered undervalued if its market value is well below its book value, since this means the stock is being traded at a discount. However, the opposite is not necessarily true.

Profitable companies often have higher market values than book values. This is because investors are optimistic about their potential for growth and expansion, and also because some companies have more earnings power, or ability to generate profit, than current assets. In some cases, however, a higher market than book value could, in fact, indicate that the asset is overvalued.

Market value vs. market capitalization

Market value is a term often used interchangeably with market capitalization, but wrongfully so.

Market capitalization is a much simpler measurement than market value. To arrive at a company’s market capitalization, you multiply the number of shares outstanding by the current price of a single share. Market capitalization solely measures the equity value of a company.

In contrast, market value paints a broader, more nuanced picture of a company’s financial standing. It isn’t set in stone, but varies depending on the state of the economy, falling during times of recession and rising during periods of expansion.

Market value is also more significantly influenced by market perception than market capitalization. Rebell says that because market value has so many subjective components, it has a lot in common with market perception.

“Perception, of course, can be anything including what journalists are writing about the company, or the perception of a company created by the founder’s tweets. A great example is Tesla. By many financial metrics, one might say the stock is overvalued. However, comments made by Elon Musk and the perception they create have factored into the stocks performance,” says Rebell.

This leads into one of market value’s limitations: how much it can fluctuate.

Limitations of market value

Market value is affected by factors like what industry the firm or asset belongs to, its overall profitability, and how much debt it’s taken on, among other factors. Here are some limitations of using market value as a guide for when to invest in an asset.

  • It fluctuates: A firm or stock’s market value can rise and fall considerably based on changing supply and demand, with a rise in demand met with a steady supply facilitating a temporary and misleading hike in market value.
  • It requires precedent data: It can be hard to determine the market value of a new firm or equity, because they don’t have an inherent market value. To this end, establishing market value requires historical pricing data to compare with or create realistic estimates of.

Market value calculations offer both sides of the equation a fair and transparent assessment of worth. However, because it can be so subjective, it’s important for investors to decide for themselves which metrics are most important in their own evaluation of an investment.

The financial takeaway

Market value illustrates an asset’s value to investors in the marketplace and is often used alongside other measurements to assess whether a firm or asset’s valuation is accurate.

This metric brings clarity and transparency to both buyers and sellers, but fluctuates with time, depending on factors like industry and economic conditions.

The price-to-book ratio is a way to determine if a company’s stock price accurately reflects its financial valueBook value vs. market value: Knowing the difference between these two measures can help investors pick stocksWhat is the P/E ratio? An analytical tool that helps you decide if a stock is a good buy at its current priceHow to invest in dividend stocks, a low-risk source of investment income

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