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Cryptocurrency

10 Nov 2021

Coinbase Shares plunge after Worse-Than-Expected Revenue Forecast

The Index Today

Coinbase Global Inc shares dropped by almost 12% during postmarket trading after revenue reports were released which reflected worse-than-forecasted results.

Market turbulence and declining prices were blamed for the revenue report of $1.24 billion for the third-quarter. The initial analysis made by experts came to $1.57 billion along with lower sequential revenue. Coinbase stated to all its shareholders that market conditions have significantly improved in the quarter but results may only be seen during the last quarter.

In other news, Bitcoin reached new peaks after hitting $68,000 on Tuesday. Chris Brendler, analyst at Davidson & Co said, “The numbers look bad, and they are. The issue that you have with a company report like that is that people want to know what’s happening next quarter.” The user numbers of Coinbase also dropped during the third quarter whereas transacting went up to 7.4 million, a notable decline from 8.8 million in the second.

Coinbase’s verified users went up to 73 million and expects another 8 to 8.5 million users. Julie Chariell, analyst at Bloomberg Intelligence said, “It seems to me that the trading volumes were basically as expected. The revenue seemed to be more because of yield, price earned per trade. The big question is why. One part of the reason seems to be the ongoing user shift from retail to institutions. As the mix shift continues, the average price Coinbase earns comes down.”

©Photo: cnbc.com

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