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Coinbase earnings: $1.1B loss, lower-than-expected revenue
- spaceman_2020 4y agoCash reserves down 1.5B from December 2021. Another 2 years of crypto winter + economic downturn and this can turn nasty. They haven’t innovated at all and are getting their arse kicked by FTX and Binance.
- Melting_Harps 4y agoLets see how they handle the other 2 lawsuits pending [0]; their stock price had a recent boost due to their partnership with Blackrock, but I cannot see how they are walking away from this. It's about time, too; CONbase is a blight in the ecosystem. 0: https://cointelegraph.com/news/two-more-lawsuits-for-coinbase-law-decoded-aug-1-8 https://cointelegraph.com/news/two-more-lawsuits-for-coinbas...
- pharmakom 4y agoHow do you lose money charging fees on exchange transactions?
- namecheapTA 4y agoYou spend more than you bring in?
- josephd79 4y agogotta keep up with the joneses, yolo
- stevedewald 4y agoMost of their spend is on employees and marketing/advertising.
- throwaway5959 4y agoYou pay Stanford/MIT grads with two YoE 500k in total comp?
- spaceman_2020 4y agoWho would have thought that paying React devs heart surgeon salaries could turn out this way!
- kragen 4y agoOuch, Coinbase lost over an Instagram this quarter! That sucks. Is this article implying that they had a long position in cryptocoins? I thought they only held them on behalf of their customers, who were the ones taking the risks, while they reaped transaction fees. Or did they really lose money just because their trading volume fell? Yields of 10% on bonds maturing in four years is high, but it doesn't imply an overwhelming level of risk.
- stevedewald 4y agoThey really lost money because their trading volume fell.
- nknealk 4y agoI actually think the yield is concerning. For fun, you can plug in your own assumptions to this calculator [0], but with assumptions below, the yield on bonds due 2028 implies a 20% chance of default. Market price is 0.7/face value of 1/coupon of 3.375 (from the article), payments per year = 1 with 7 payments remaining (you could also do 6, depends on whether they've made a payment this year which I didn't bother looking up), recovery rate of 60% (assumption, the model is really sensitive to this input), and the 5 year treasury rate is around 2.97 percent which I used as the risk free rate. [0] https://quantwolf.com/calculators/bonddefaultcalc.html https://quantwolf.com/calculators/bonddefaultcalc.html
- kragen 4y agoThank you for quantifying that. I was thinking it meant about a 10% chance of default and about a 10% chance of bankruptcy, and I appreciate the correction. 10% or 20% is "concerning" from some points of view, but what I meant was that creditors still think Coinbase is more likely to be in business 5 years from now than to be bankrupt.
- htrp 4y ago377mn non cash impairment charge......