Coinbase share price plummets on earnings miss
Updated
US cryptocurrency exchange Coinbase’s share price plummeted in after-hours trading Tuesday on an earnings miss.
Coinbase was down more than 13% in after-hours trading before, rallying somewhat on the Nasdaq Global Select market, as the company delivered its third-quarter financial results in a shareholder letter.
The company operates the largest cryptocurrency exchange in the US.
Adjusted EPS misses prediction
Coinbase posted adjusted earnings per share (EPS) of $1.62, up more than double from $0.56 a year earlier. But analysts polled by Dow Jones had predicted adjusted EPS of $1.82.
Coinbase reported basic EPS of $1.92, up more than threefold year-over-year from $0.61.
Strong year-over-year improvement
While the company showed strong year-over-year improvement, it has struggled in recent quarters – despite a rise in digital currency prices. On Monday 8 November, Bitcoin reached a new all-time high of $68,000 and Ethereum established a new record by surpassing $4,800.
Monthly transacting users fell 15.92% to 7.4 million from 8.8 million in the second quarter. However, the third-quarter total of 7.4 million represented a 21.31% rise from 6.1 million a year earlier.
Trading volume fell 29.22% $327 billion from $462 billion in the previous quarter.
The company encouraged shareholders to take a long-term view.
“We are in the early stages of the development of the cryptoeconomy and are focused on investing for long-term growth,” said the company in its letter.
Volatile business
“As our year-to-date results have clearly demonstrated, our business is volatile. Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the cryptoeconomy and our ability to serve users through our products and services.”
Net income increased more than fivefold to $406m from $81m a year earlier. Revenue of $1.24bn more than quadrupled year-over-year to $1.24bn from $287m.
Coinbase delivered its earnings report after the closing bell. The company’s share price rose about 1% during regular trading hours to close at $357.39.
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