- Stock down more than 80% since IPO
- Users and volumes plunge with no sign of let-up
- Q1 $1.98 loss per share versus $0.05 earnings forecast
So much for Coinbase (COIN:NASDAQ) being the stable way to play bitcoin and cryptocurrencies. Since its IPO (initial public offering) 15 months ago, the stock flopped badly, losing more than 80% and sending many speculative investors running for cover, many never to return.
Coinbase shares have performed worse than many of the cryptos, certainly bitcoin, which is down about 50% during the same timeframe. Having lost 12% on Tuesday, investors can expect more heavy selling when Wall Street reopens later today, with pre-market data pointing to another 16% decline to $61.19.
Latest quarterly results posted after hours overnight, will do nothing to restore confidence, nor will its guidance. First-quarter earnings were way off estimates, coming in at a $1.98 loss per share versus consensus $0.05 forecasts, while revenue was $1.16 billion, missing the consensus estimate of $1.5 billion.
Monthly Transacting Users, or MTUs, fell 19% quarter-on-quarter to 9.2 million and total trading volumes dropped 44% to $309 billion, roughly in line with the broader crypto spot market. Subscription and services revenue decreased 29% to $152 million in Q1.
LITTLE TO LIFT SPIRITS
Guidance for Q2 is for MTUs and total trading volume to continue to fall, while subscription and services revenue is expected to be similar to modestly lower in Q2 compared to Q1.
Where this leaves investors is anyone’s guess. There’s no sign of bitcoin stabilising and no hint that investors will come flooding back to Coinbase anytime soon.
Rightly or wrongly, risk assets remain out of favour and cryptos look riskier than most. While a semblance of economic and markets stability could draw investors back to growth and tech stocks later this year, it looks increasingly like 2022 will go down as a nasty bear market for bitcoin, cryptos, and Coinbase.
