Key Takeaways
- Coinbase will join the S&P 500 on May 19, replacing Discover Financial.
- The announcement follows Bitcoin's surge past $100,000.
- Coinbase posted $65.6 million in net income and $2.03 billion in revenue last quarter.
Coinbase will be added to the S&P 500 index on May 19, replacing Discover Financial Services, which is being acquired by Capital One.
The announcement sent Coinbase shares up 8% in after-hours trading.
Bitcoin’s impact on Coinbase
The move comes just days after Bitcoin surpassed the $100,000 mark, nearing its all-time high from January.
Coinbase, which went public in 2021, has grown to a $53 billion market cap, despite trading well below its 2021 peak of over $357.
The stock closed Monday at $207.22.
Financial performance and S&P 500 inclusion
Coinbase reported $65.6 million in net income last week, meeting S&P 500 inclusion criteria requiring profitability over the most recent quarter and cumulatively over the past four.
Revenue increased 24% year-over-year to $2.03 billion.
Tech sector dominance in S&P 500
The S&P 500, increasingly dominated by tech companies, continues to absorb firms across the sector.
Last year, companies like Palantir, CrowdStrike, and Super Micro Computer were added.
Stocks often see a price boost upon joining, as index-tracking funds are required to buy shares.
Strategic acquisition of Deribit
Coinbase also revealed a $2.9 billion deal last week to acquire Deribit, a major Dubai-based derivatives exchange.
The acquisition is the largest in the Bitcoin industry to date and expands Coinbase’s reach beyond the U.S.
Year-to-date performance
Despite recent gains, Coinbase shares are down 17% year-to-date.
In comparison, Bitcoin is up roughly 10% over the same period.
