Coinbase shares sink after trading weakness hits quarterly profit
Its stock was last trading at $334.48, on track to wipe out nearly $11 billion of market value if current levels hold.
"We see the shares as significantly overvalued. We believe that the market is projecting too much future growth for the firm," Morningstar analyst Michael Miller wrote in a note.
The sharp investor reaction underscores the challenge Coinbase, as a major player in the crypto space, faces to sustain its recent strong revenue growth.
Its shares have gained 52 per cent so far this year as of their last close, ranking among the top 15 gainers on the benchmark S&P 500 index, which Coinbase joined in May.
Analysts, however, said trading volumes could improve this quarter, based on the company's revenue estimates for July.
The month saw a surge in crypto enthusiasm after the Genius Act was signed into law. The landmark legislation pushed bitcoin to a record high.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
3 hours ago
- CNA
Cadillac will add value as 11th F1 team, says McLaren's Brown
LONDON :Cadillac's arrival in Formula One next year as an 11th team will bring added financial value with new partners and more fan engagement rather than diluting resources, according to McLaren's American chief executive Zak Brown. The General Motors-backed team have taken staff already from rival outfits, their European headquarters at Silverstone being close to other factories, and are also competing for sponsorship. Brown, whose team are dominating this year's championship after winning the 2024 constructors' title, saw no reason to fear a dilution of resources, however. "I think on employees they are definitely going to take a lot more than they give, which is fine," he said at last weekend's Hungarian Grand Prix. "My general view is if someone wants to go work for a rival team then shame on me. "For sponsors, I think they'll bring more new to the table than take." Brown expected Cadillac also to bring more competition eventually, although they faced a tough challenge as newcomers, and more fans to a series that now has three U.S. rounds and a growing audience in America. "Will we get a better U.S. TV deal, more American presence? I think their sponsors and Cadillac will spend money in the sport, the teams get a percentage of that so I see them as a value add to the sport," he added. "I'm not worried about maybe some of the short term-ness of they are going to take an employee here or there or poach a sponsor here or there. I think the contribution will be bigger than that." Cadillac secured approval of their bid in March, after a 764-day entry process and initial opposition from Formula One and the other 10 teams wary of a potential reduction in the share of revenues. The team are also backed by TWG Global, whose CEO Mark Walter has an estimated net worth of $12.5 billion, according to the Bloomberg Billionaires Index. The first new team since U.S.-owned Haas debuted in 2016 said in July they were already two thirds of the way towards a targeted headcount of 600 by next season and no longer even the smallest outfit.
CNA
6 hours ago
- CNA
Dollar rises versus euro and yen before US economic data
The dollar edged up against the euro and the yen, but remained within striking distance of Friday's lows, after weak U.S. jobs data boosted bets on Federal Reserve rate cuts and triggered a sharp selloff in the greenback. Investors are awaiting services data from the Institute for Supply Management (ISM), which should show a mild improvement supporting the greenback. Goldman Sachs expects the Fed to deliver three consecutive 25 basis-point rate cuts starting in September, with a 50 basis-point move possible if the next jobs report shows a further rise in unemployment. It also sees the European Central Bank as having concluded its easing cycle. Economists raised their growth forecasts for the euro area and Japan following relatively benign trade agreements, while arguing that Friday's U.S. jobs report confirmed the economy is hovering near stall speed. Meanwhile the firing of the head of the Bureau of Labor Statistics (BLS) on Friday, and the resignation of Fed Governor Adriana Kugler, could harden the views of the FOMC to ensure its independence is protected, analysts said, recalling that the new appointee will be just one vote on the Fed's Federal Open Market Committee (FOMC). The euro was last down 0.25 per cent at $1.1544, after hitting on Friday $1.15855. The dollar index, which measures the U.S. currency against six counterparts, was up 0.30 per cent at 98.864, after touching a one-week low earlier in the session at 98.609. "Traders likely inferred that the (U.S. jobs) report gave President Donald Trump even more justification to 'fire' Jay Powell," said Thierry Wizman, global forex and rates strategist at Macquarie Group. "Alternatively, it gave Trump even more support for giving the Chairmanship to someone that would be more 'structurally' dovish," he added, arguing that Friday's employment report shifted the outlook for where the Fed Funds rate target will be one year from now. Sterling edged higher against the dollar, as traders expect the Bank of England to maintain its rate guidance at this week's policy meeting. It was last up 0.05 per cent at $1.3291. RATE CUTS Money markets are now pricing in a 92 per cent chance of the Fed cutting rates in its next meeting in September, compared with 63 per cent a week earlier. They also indicate 130 bps of rate cuts by October 2026, 30 bps more than the levels seen on Friday before U.S. jobs data. The Japanese yen was down 0.34 per cent at 147.6 per dollar after minutes of its June policy meeting showed a few Bank of Japan board members said the central bank would consider resuming interest rate increases if trade frictions de-escalate. "The pressure to hike (rates) could also come from a wish to help support and stabilise the Japanese government bonds (JGB) market," said Derek Halpenny, head of research global markets at MUFG, mentioning a weak outcome of a JGBs auction. "But JGB market instability remains a downside risk for the yen," he added. The focus remains on tariff uncertainties, after the latest duties imposed on imports from scores of countries last week by Trump stoked worries about the health of the global economy. The 15 per cent tariff that European Union goods face when entering the U.s. is all-inclusive, a senior EU official said on Tuesday. The Swiss franc extended losses for a second day, weakening 0.25 per cent to 0.8103 per dollar after dropping 0.5 per cent in the previous session. However it was still above the levels seen before Friday's economic figures, at around 0.8128. Switzerland is looking to make a "more attractive offer" in trade talks with Washington, to avert a 39 per cent U.S. import tariff on Swiss goods that threatens its export-driven economy.
CNA
6 hours ago
- CNA
Infineon lifts profit outlook as semiconductor market revives
BERLIN :German chipmaker Infineon slightly raised its full-year profit guidance on Tuesday after reporting stronger-than-expected quarterly earnings, and said global semiconductor markets had begun to recover despite lingering tariff concerns. It said it was well-placed to take advantage of the increase in semiconductor demand, including from the car sector and AI data centres. Shares fluctuated after the results, rising by 4.2 per cent at 1049 GMT after an early fall of 1.9 per cent. Infineon's segment result margin - its preferred measure of operating profitability - climbed to 18 per cent for the fiscal third quarter ending in June, beating analysts' expectations of 15.8 per cent. The company credited the performance to a faster-than-anticipated rebound in its Green Industrial Power and Power & Sensor Systems divisions, driven by rising demand for energy-efficient technologies and power semiconductors used in data centres. "The semiconductor markets are slowly recovering from the prolonged downturn," said Infineon CEO Jochen Hanebeck in a conference call. Hanebeck reaffirmed expectations that sales from Infineon's chip business for AI centres would double to around 600 million euros ($692 million) for the fiscal year. In response, Infineon raised its full-year segment result margin guidance to a high-teens percentage, up from the mid-teens range projected earlier, partly due to lower investments. The company revised its capital expenditure forecast for the fiscal year to 2.2 billion euros, down slightly from the previous estimate of 2.3 billion euros. Fourth-quarter revenue, adjusted for currency effects, is expected to rise to 3.9 billion euros, up from 3.7 billion euros in the third quarter. Infineon clarified its previous full-year sales forecast from May of a slight decline from the previous year's 14.96 billion euros and now predicts around 14.6 billion euros. Although the overall revenue trajectory fell short of some expectations, analysts were upbeat. "With tariff uncertainty subsiding, we remain positive on the cyclical and structural growth outlook, and further margin recovery," Janardan Menon of Jefferies said.
