Let's talk about the deal between the Middle Eastern tycoons and Binance

The UAE's $2 billion investment in a minority stake in Binance has been hot for two days. Today, we will simply estimate whether this deal is cost-effective. After all, the Middle Eastern tycoons who are stupid and rich have bought assets (petrochemical smelting) at a premium of double in the A-share market before.

$2 billion - minority stake, the specific details have not been disclosed, it should be 1%-5%, so Binance is valued at $200 billion to $40 billion.

Looking at Binance's net profit, the gross estimate is between $10 billion and $20 billion. Here are a few data references: ① According to the news on a certain day in 2021, Binance made 200 million RMB a day, which is 75 billion RMB a year, ② There are data estimating that its net profit in 2024 will be $19.2 billion. So let's assume that $15 billion is relatively reliable.

Then, the valuation of the shares purchased by the UAE is PE2.67~13.33 times. This highest valuation is less than half of Nvidia's PE and is lower than any outstanding listed company. Considering the monopoly and growth potential, this is a super cost-effective deal. It seems that the Middle Eastern tycoons are not stupid this time, and CZ's favor has the best of both worlds.