Penny Stocks To Watch As Coinbase IPO Sparks Tech Momentum
Penny stocks are interesting for many reasons. But possibly the biggest has to do with their innate ability to move on sympathy. Sometimes it's a more direct correlation to the root catalyst. Other times it just so happens that companies have certain exposure to an industry in one form or another.
The stock market today has all eyes on a big tech IPO. Coinbase (NASDAQ: COIN) is set to go public in a direct listing. This is similar to how Palantir (NYSE: PLTR) went public as well. This week, Coinbase said that there are 130.7M shares of Class A common stock outstanding and 68.5M shares of Class B common stock outstanding. Furthermore, its fully diluted capitalization stands at 261.3M shares of common stock.
Should you buy the Coinbase IPO? That's a question that only you can answer. However, just like the cryptocurrencies that it offers traders, COIN stock could be volatile as well. Even just the news of this IPO struck a bullish chord with cryptocurrency traders this week. We saw plenty of penny stocks pop as well.
Bitcoin reached new record highs along with many other leading coins, including Ethereum. We also saw the famous meme coin, Doge, explode to fresh record highs above 10 cents per coin. But like many hyped tech IPOs, some questions have come up as far as whether or not the Coinbase IPO is worth buying into at this early stage.
What we can see, however, is that news of the event has helped give many small-cap tech names a boost. Some have a more direct correlation to bitcoin and blockchain tech. Others have little to no relation to crypto but are involved in the broader technology sector. With this in mind, it will be important to understand your risk tolerance. You might also want to grab the Pepto Bismol in case things get a bit volatile.
Best Penny Stocks To Buy [or avoid]:
- Phunware Inc. (NASDAQ: PHUN)
- Future Fintech Group Inc. (NASDAQ: FTFT)
- Siebert Financial (NASDAQ: SIEB)
1. Phunware Inc. (NASDAQ: PHUN)
Phunware Inc. is a tech company that we've been covering for quite some time. Earlier this year, the enterprise cloud platform business announced the purchase of 25.8 bitcoin. It executed this at an average price of $58,133 per coin. The goal is to build a new blockchain-based MaaS customer data platform that will go hand in hand with its MaaS Mobile Loyalty Ecosystem. It will also issue its PhunCoin and PhunToken to reward consumers for their engagement on its platform.
CEO Alan Knitowski states that we are "thrilled to actively participate in such a vibrant global market and community alongside Tesla, MicroStrategy, Square and many other corporations and funds worldwide. We expect to leverage more than a decade of our mobile experience to drive the mainstream adoption of cryptocurrencies while simultaneously offering enterprises and governments the opportunity to leverage the benefits of blockchain to drive profitable behavior."
Phunware also partnered with BitPay to expand the corporate benefits for its employees, utilizing crypto. For some background, Phunware operates multiscreen-as-a-service or MaaS platforms. These allow companies to have access to solutions, data, and services to monetize at scale.
This week it launched its Loyalty Software Development Kit for Apple and Android systems to support the issuance of PhunToken by mobile applications. This adds another layer to its MaaS ecosystem to broaden access to the platform itself.
2. Future Fintech Group Inc. (NASDAQ: FTFT)
Future FinTec one of the digital finance companies gaining ground on fresh news. It operates blockchain technology for eCommerce and financial technology. This week, Future announced a framework agreement to acquire a cryptocurrency mining farm. This is through a 51% stake in Mingtang Network Technology in China.
According to the update, Mingtang Network's data center has a 50,000 capacity load for cryptocurrency mining machines. It also has the ability to run big data mining applications and is fully operational. Mingtang Network's cryptocurrency mining farm has been granted all necessary governmental approvals in China. The company also struck a deal to invest in constructing a Phase II data center of a 50,000 capacity load for crypto mining machines. Obviously, with the Coinbase IPO going live, crypto mining stocks have become a focus.
Shanchun Huang, Chief Executive of Future FinTech, commented, "We intend continue to purchase cryptocurrency mining machines, make additional acquisitions of cryptocurrency mining farms and promote the development of secure and evolutionary cryptocurrency applications."
3. Siebert Financial (NASDAQ: SIEB)
While Siebert Financial hasn't been as vocal as the other names on this list of penny stocks, it could be one to watch in light of the Coinbase IPO. Ironically, it was previously on retail traders' watch lists this year as Reddit penny stocks topped stock market headlines. Shares of SIEB stock jumped as high as $18.50 amid the mass retail breakout.
Needless to say, things have settled back down. However, something that could be in focus thanks to the Coinbase IPO is Siebert and other firms operating commission-free brokerages. The phrase "race to the bottom" has become actively used in this space. We saw it when Robinhood effectively changed how brokerages charge for trades of stocks and options. According to some, it could be time for a similar scenario in the cryptocurrency brokerage marketplace.
Sibert hasn't come out to say that it directly operates a crypto platform. However, the company invested in a platform called OpenHand. This is a zero-commission, subscription-based brokerage platform. The company's Siebert Technologies, LLC. is also a developer of Robo-advisory technology, which could come in handy if there were ever an opportunity to blend its product mix cohesively.
Aside from this, early momentum could be due to speculation and sympathy with another broker going public today. As of right now, OpenHand doesn't show anything related to crypto trading. However, shares of SIEB stock have jumped during pre-market trading with no news or filings from the company.
Should You Buy The Coinbase IPO?
Whether or not the Coinbase IPO is right for you may come second to the sympathy sentiment brought about in the stock market today. Given that there are multiple angles to look at the company, everything from niche techs like blockchain to broader tech like SaaS and Maas has gotten attention. So even if you're not one of the gunslingers of this latest IPO, the ripple effects could place many penny stocks on the watch list as a result.
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