Plug Stock Scandal; Coinbase’s $68 Billion Valuation

Buoyed by news from the Federal Reserve, stocks erased early morning losses and finished higher on Wednesday, with all three major U.S. indices closing in the green.

The majority of Fed members still expect to keep interest rates near zero through the end of 2023, a dramatic measure that brought a sense of calm to investors. The Fed will also continue its $120 billion monthly bond-buying program, stimulating the economy through regular injections of capital.

The Dow Jones Industrial Average rose 189 points, or 0.6%, to finish at 33,015.

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Plug Power’s light is flickering. After going on an incredible rally that saw shares jump more than 1,400% in the last year, fuel cell maker Plug Power (ticker: PLUG) hit the skids on Wednesday, with shares finishing down more than 7.8%.

The sell-off came in the wake of the company’s announcement that it had found accounting misstatements in its results for 2018, 2019 and the first three quarters of last year. Accounting errors can sometimes just be a blip in a long-term success story, but careful companies tend not to make them in three consecutive calendar years.

Hints for Coinbase’s IPO valuation. Coinbase, a leading cryptocurrency exchange that has helped many retail investors dip their toes into the hot new asset class, is fetching a $68 billion valuation in private share sales. The company, which plans to go public soon via a direct listing, will list itself on the Nasdaq and will trade under the ticker “COIN”.

Private market valuations gleaned through private share sales are less indicative of a company’s true value than something like a fundraising round with venture capitalists, but it still serves as a watermark for where shares might trade when they debut.

Two timely IPOs pop. Two IPOs rose on their first day of trading on Wednesday: Sun Country Airlines (SNCY) and restaurant tech company Olo (OLO). Airlines are increasingly back in business with widespread vaccine distribution, and Olo’s technology helps companies facilitate online orders and delivery. SNCY rose more than 51% while OLO added 39% on Wednesday.

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