- COIN
-10.59%
Coinbase Global (COIN) stock tumbled more than 12% on Friday, putting it on pace for its steepest one-day drop in nearly a year.
The move came after company posted a wider-than-expected second quarter net loss on Thursday, marking its third quarter in the red since the crypto market began to drawdown from its October highs. (Disclosure: Yahoo Finance has a partnership with Coinbase.)
The company reported a net loss of $359 million, or $1.36 per share. That compared to a profit of $1.43 billion, or $5.14, in the year-ago period. Analysts anticipated a net loss of $0.44 per share.
Coinbase’s stock was down over 27% so far this year as of its closing Thursday price.
(COIN)
Go deeper with AlphaSpace
146.26-17.32(-10.59%)
At close: July 31 at 4:00:01 PM EDT
Beyond the effect of falling crypto prices on Coinbase’s investment holdings, its core revenue streams also weakened. Net revenue fell 17% from a year ago to $1.15 billion. The company’s adjusted EBITDA dropped 59% from the year-ago period to $208 million, missing analyst expectations by a third.
“We like the direction … but the near-term setup is tough,” Mizuho analyst Dan Dolev told clients on Friday. The bank said it is lowering its price target for Coinbase stock from $200 to $155 per share.
In the second quarter, a blistering rally in semiconductors and other AI-related stocks, along with rapid geopolitical shifts in the ongoing Iran war, brought a windfall to investment bankers and stock traders at Wall Street banks.
Coinbase’s investing app competitors with less dependence on crypto, including Robinhood (HOOD) and Charles Schwab (SCHW), also reported sharply higher revenue from trading fees.
But the crypto market faced softer asset prices and lower volatility, which translated into muted trading for the major crypto exchange. The company said its transaction revenue fell 22% from the year-ago period to $600 million.
Coinbase CFO Alesia Haas acknowledged crypto’s “down market” but pointed to record paid membership in Coinbase One as evidence that customers remained engaged in the quarter.
Coinbase’s nontrading subscription and services revenue, which includes income from stablecoins, interest and financing fees, and crypto staking and custody, fell 12% from a year ago to $555 million. Even so, the category helped cushion revenue from declining trading fees, accounting for 48% of Coinbase’s quarterly revenue.
“At any given time in trading, there’s always something that’s up and something that’s down,” CEO Brian Armstrong told analysts Thursday, adding that part of the firm’s strategy depends on “having all the shelves stocked” to capture demand for whichever market is surging.
