Coinbase ‘one of the few survivors’ amid crypto crisis, analyst says – Yahoo Finance

January 11, 2023 by No Comments

Oppenheimer Executive Director and Senior Analyst Owen Lau to weigh in on Coinbase’s latest round of layoffs and how the company’s cost-cutting moves are helping it stay afloat in the broader crypto space.

Video Transcript

SEANA SMITH: Coinbase shares closing up about 13% today after announcing plans to cut 20% of its staff. Now the stock, though, has been under a tremendous amount of pressure over the last year, off about 80%.

Well, ahead of this announcement today, our next guest warned about the cuts in his latest note that was published yesterday, so we want to bring him in. Owen Lau is Oppenheimer’s executive director. Owen, it’s great to see you here.

You nailed it. You said that we needed to be prepared for Coinbase to cut further and talking about layoffs, talking about what has certainly been a crypto winter, and it has been weighing on the stock. What do you think of the size of the cuts today? Is it enough?

OWEN LAU: So first of all, thank you for having me. So you just got it. We published a note. We said that Coinbase should cut around 20% to 30% of the workforce, and it came in at around 20%. To me, I think it’s enough for now based on current trading environment, but longer term, I wouldn’t be surprised if they do further cut. But based on our math, their number of employees should be about like a little bit over 3,000 after these cuts. So I think for now it should be enough, but we will see longer term and how the trading volume trends.

DAVE BRIGGS: Does this do anything to change your outperform and $72 price target on the stock?

OWEN LAU: It does not because we have expected they are going to do something like that with the sought [AUDIO OUT] cut. And actually longer term– first of all, we recognize the challenging environment in the crypto space, like, you know, crypto winter. I think they say a crisis of confidence going on.

But if you believe in this technology, believe in digital assets and blockchain, there will be some survivors. And based on our math, Coinbase has a pretty strong balance sheet to survive through this period. So longer term, we believe Coinbase can be one of the few survivors. So longer term, we remain positive on the stock.

SEANA SMITH: So, Owen, speaks to me a …….



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