How to Buy Couchbase (BASE) Stock

Contributor, Benzinga

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Couchbase (NASDAQ:BASE)

18.500

0.48 [2.66%]
17.84 – 18.85
11.68 – 52.26
18.24
44.55M
96.61K/33.01K
824.19M
44.55M
/0%
0.000
28.23M

Well before the COVID-19 pandemic disrupted our business and commerce ecosystems, cloud computing was already sparking its own paradigm shift. By enabling enterprises to migrate their operational and storage demand channels to data server networks located off-premises, organizations of any size could effectively scale up their endeavors to match the business trajectory.

Sure enough, the global health crisis and its incentives for remote work drove demand for Couchbase, a cloud-driven database solutions provider, which facilitates modularity and rapid scaling for enterprise-level clients. Naturally, Couchbase’s relevant business sparked much interest for its initial public offering (IPO).

Couchbase Financial History

The global cloud computing market is a massive business that’s only getting bigger. According to MarketsandMarkets.com, this sector reached a value of $371.4 billion in 2020, which is a staggering sum. However, industry experts project that the segment will expand at a compound annual growth rate of 17.5% to $832.1 billion by 2025. For perspective, that’s more than the gross domestic product of the Netherlands.

You shouldn’t be surprised to learn that the Couchbase IPO was most hotly anticipated in terms of internet search queries. But the enthusiasm isn’t just centered on the debut itself but rather the company’s strong fundamentals. Attracting blue chip clients such as United Airlines (NASDAQ: UAL), Cisco Systems (NASDAQ: CSCO), Wells Fargo (NYSE: WFC) and Comcast (NASDAQ: CMCSA) among many others, Couchbase carries an enviable magnitude of credibility.

Most importantly, the underlying acumen transfers to robust financial growth. In the year ended Jan. 31, 2021, Couchbase generated revenue of $103.3 million, up 25% from 2019’s tally of $82.5 million. With the COVID-19 pandemic forcing a shutdown of nonessential activities, cloud-based solutions became all the rage. Encouragingly, Couchbase carried this momentum into 2021, with the quarter ended April 30, 2021, seeing revenue at nearly $30 million, up 21% from the year-ago quarter.

To be fair, not everything about the Couchbase IPO is a green light. Perhaps most glaringly, the company posted a net loss of nearly $40 million last year, which expanded from a loss of $29.3 million in 2019. Also, the red ink continues to accelerate, with the tech firm’s fiscal first-quarter net loss amounting to $14.6 million. At this rate, it will significantly trounce 2020 losses.

Still, the bottom line for prospective buyers could be Couchbase’s support among private equity firms. Since January 2009, the company has raised a total of $251 million.

Couchbase Potential

To appreciate the true potential of Couchbase, interested investors should have a basic understanding of its core business. Focusing on distributed NoSQL cloud database services, the Couchbase platform steadily garnered a vast subscriber base thanks to its ability to help developers build applications quickly and deploy them to the market before their competitors do. The beauty of the Couchbase architecture lies in its NoSQL interface, which represents an advancement in application technology.

First, let’s define something. SQL stands for Structured Query Language, a protocol you use to access relational databases or data held in tables consisting of rows and columns. It’s called relational because search queries can link (or relate) data based on common attributes. In prior generations, programmers conducted their development models using relational databases because they efficiently organized data. At the time, computer storage commanded a hefty premium.

However, relational databases were cumbersome because programmers had to neatly arrange their work within said databases’ confines. Further, should a development model change significantly, it would require time-consuming modifications to the relational database. Imagine trying to post a lengthy statement on a social media platform that restricts your word count. You would have to spend time not only on formulating your thoughts but also on being as succinct as possible.

But with NoSQL databases, this innovation has no set structure, allowing programmers to essentially have free reign in their software development — it’s the social media platform mentioned above but without the restricting word count. This freedom provides incredible modularity, allowing Couchbase’s NoSQL application to stack and scale according to the demand requirements of the enterprise-level client.

How to Buy Couchbase (BASE) Stock

Almost always, financial advisors steer people who are new to the investing world toward stable blue-chip stocks for their greater predictability. These securities trade in the secondary market or what most people have in mind when they hear the term stock market. Usually, such assets are listed on major exchanges like the New York Stock Exchange or Nasdaq.

In contrast, an IPO is an example of a primary market transaction, which involves dealings of newly issued stocks. Regarding a traditional public market offer, the issuing company creates shares while underwriters find them a home, typically with institutional investors since they’re much more profitable than regular retail buyers.

In most cases, public investors must buy IPO shares at the open. While disadvantageous from a price perspective, public buyers have no obligation to participate in other IPOs if they don’t want to. Further, the process is easy. If you already know how to buy stocks, you can jump right in. If not, just follow the steps below. After the IPO’s debut, you can place market orders like you would with any other stock.

Step 1: Pick a brokerage.

People used to generally choose brokerages based on cost. With advanced technology improving access, most brokers have now standardized incentives such as commission-free trading. Instead, the deciding factor today is available features.

For example, some brokerages offer the ability to buy pre-IPO shares or new issues at their initial offering price. If IPOs are something you’d be interested in, you should consider platforms that provide the most access. After the IPO, you can use the broker that works best for you. Below is a list of the best brokers to choose from.

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Best For
Intermediate Traders and Investors
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1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
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Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No chat support
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Best For
Desktop Trading
N/A
1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For
  • Active traders
  • Derivatives traders
  • Retirement savers
Pros
  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
Cons
  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform
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Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
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Best For
Momentum traders
N/A
1 Minute Review

CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.

Best For
  • Intermediate to Advanced traders
  • High-volume traders
  • Momentum traders
  • Short sellers
Pros
  • Unrivaled access to short inventory
  • Flexible order routing for improved executions
  • Discounts for active traders
  • Advanced platform with fast executions
  • Reliable customer service
Cons
  • Not designed for beginner or low-volume traders

Step 2: Decide how many shares you want.

The share count is crucial as it determines your risk-reward profile, with higher counts leading to greater rewards but also exposure to more risk. Choose a balanced number that won’t keep you up at night if circumstances go awry.

Step 3: Choose your order type.

Before placing your order, familiarize yourself with these market concepts:

  • Bid: The highest price a buyer will offer, the bid is always lower than the ask.
  • Ask: The lowest price a seller will accept, the ask is always higher than the bid.
  • Spread: The bid-ask price variance, the spread also signifies liquidity and risk. Narrower spreads suggest willingness to negotiate, thereby indicating higher liquidity and lower risk. The opposite is true for wider spreads.
  • Limit order: A request for fulfillment at a specific price, limit orders offer full control but no execution guarantee.
  • Market order: In contrast, a market order guarantees fulfillment at the prevailing rate but at unfavorable terms (like buy orders on the ask).
  • Stop-loss order: Stop-loss orders are protective mechanisms to mitigate downside volatility. However, such orders will be fulfilled at either a predetermined price or any price lower than the requested rate.
  • Stop-limit order: A stop-limit order only exits your holdings at a specific price, which can be rendered useless if the target stock keeps falling.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Limit orders follow the same sequence, but you must also enter your desired execution price.

Modularity for a New Generation

With software innovations occurring at breakneck speeds, it’s never been more important to enhance developmental efficiencies. Through Couchbase’s cloud-driven NoSQL database application, enterprise clients enjoy modular end-to-end services from blueprinting to deployment. As well, the BASE stock is compelling because of the post-COVID paradigm of remote work.