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Coinbase announces fresh job cuts, stock erases earlier gains
© Reuters
By Senad Karaahmetovic
Shares of Coinbase (NASDAQ:COIN) are moving lower in pre-market Tuesday after the company announced it plans to reduce its workforce by about 950 people.
Coinbase expects to complete its restructuring plan, aimed at reducing operating expenses, by the second quarter of 2023. As a result, Coinbase expects to incur approximately $149 million to $163M in restructuring expenses, all to be recognized in the first quarter of this year.
Reductions are “in response to the ongoing market conditions impacting the cryptoeconomy, as well as ongoing business prioritization efforts,” the company said in a filing.
Moreover, Coinbase also announced preliminary results for its year ending December 31, 2022. The adjusted EBITDA for FY22 is expected to be "within the negative $500 million loss guardrail that the Company provided in the Shareholder Letter."
“The Company expects to report Average Annual MTUs, Average Transaction Revenue Per User, and Subscription and Services Revenue, as well as certain operating expenses - comprising Transaction Expenses, Sales and Marketing Expenses (including stock-based compensation), and Technology and Development + General and Administrative Expenses (including stock-based compensation) - to be consistent with the Full-Year 2022 Outlook provided in its November 3, 2022 letter to shareholders,” it further said.
Coinbase stock was defended earlier today at Oppenheimer with analysts arguing that shares have baked in a lot of negative news lately.
“We believe many positives are unnoticed, and potentially not priced into COIN, including: 1) diversification with subscription and service revenue potentially reaching 50% of total; 2) market share gains; 3) strong balance sheet; and 4) one-sided trade with short squeeze potential. While painful near term, Coinbase can be one of the few long-term survivors in this space, which we think makes it attractive,” they said in a client note.
As of 07:10 ET (12:10 GMT), Coinbase stock is down over 4%.
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