Welcome to the Tunji Letter, Edition #42.
// Financial Term of the Week
Ex-Dividend Date
The ex-dividend date is when a stock starts trading without the value of its next dividend payment. That essentially means that the ex-dividend date is the cut-off date for those entitled to receive a company’s dividend. For example, if Company A’s ex-dividend date for their Q1 dividend is April 23rd, that means that only shares purchased before April 23rd will be eligible for the Q1 dividend.
// Coinbase IPO
Coinbase, the largest cryptocurrency exchange in the United States by trading volume, announced its IPO through a direct listing on April 14th, 2021. The company’s ticker will be COIN. With the major rally cryptocurrency has had since last summer, and with the overall boosted acceptance of cryptocurrencies by retail and institutional investors, Coinbase entering the public markets only makes sense.
Some analysts have valued Coinbase as highly as $100 billion, which is impressive for a company founded in 2012. It was recently announced that the company had revenue of $1.8 billion in Q1 of 2021. That is a major jump from $190.6 million in revenue in Q1 of 2020. As long as Coinbase continues to make its platform the easiest platform to buy Cryptocurrency on, the company reaching a market capitalization of $100 billion in the public markets is not unrealistic.
// $IWM
The iShares Russell 2000 ETF (IWM) is an ETF that seeks to track the performance of the Russell 2000 Index. The Russell 2000 is an index that measures the performance of small-cap stocks in the United States. The Russell 2000 is the most common benchmark for mutual funds that identify as small-cap and mid-cap focused. That is the case because the Russell 2000 reflects a wider range of investment opportunities than an index such as the S&P 500, which heavily favors its top members due to their extremely high market caps.
As of April 9th, 2021, IWM has a price of $222.59 and an expense ratio of 0.19%. Over the past five years, IWM has provided a total return of approximately 116% and an average annual total return of approximately 17 %, with dividends reinvested. IWM allows you to gain exposure to companies such as Plug Power, Penn National Gaming, Caesars Entertainment, and Novavax. IWM is not a perfect ETF, but understanding its importance in providing exposure to smaller-cap companies allows for easy exposure to companies that may grow into key leaders in their sectors and industries.
// Latest Articles
Check out my latest articles:
· 2 Infrastructure ETFs to Know About
· 3 Quick Points to Help Assess Your Risk Management When It Comes to Investing
· 2 Clean Energy ETFs to Know About Now
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Thank you for reading!
Tunji
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