Despite a recent hike in its stock price, Coinbase is allegedly scheduled to underperform in 2023 according to a new report issued by Bank of America. The financial conglomerate says the company’s stock – which is presently trading for about $50 a pop – could fall as low as $35 in the coming weeks.
Coinbase Keeps Hitting Barricades
Strategists wrote in their report:
With the crypto outlook for 2023 murky at best (as evidenced by COIN’s second round of job cuts announced yesterday), we lower our 2023 revenue estimates for COIN even further below Street… This lower volume forecast drives five percent/three percent reductions in our ’23 transaction revs/total net revs to $1,264M/$2,253M, which are now 32 percent/24 percent below Street.
It appears Coinbase just can’t seem to catch a break. The company announced a few days ago that it was going to be laying off close to 1,000 people. The national crypto exchange says the ongoing volatility and speculation brought on during 2022 has been too much to handle, and with currencies everywhere crashing like they never have before, it’s had no choice but to relieve additional employees of their duties and send them packing.
CEO Brian Armstrong has commented that the layoffs are part of a grander plan to reduce operating costs by as much as one quarter in the coming months.
In addition, the brother of a former Coinbase manager has been sentenced to ten months in prison for allegedly engaging in an insider trading scheme, arguably the first of its kind in the crypto space. While no current employees of the firm have been indicted or arrested at the time of writing, one can imagine that just having the company’s name mentioned in such news doesn’t look great for the already ailing firm.
Nikhil Wahi first made headlines a few months ago when it was announced he had engaged in trades based on confidential data stemming from Coinbase. Wahi would find out which coins would be listed on the famed exchange, then purchase units of the assets along with various associates (i.e., his brother Ishan and a friend named Sameer Ramani) knowing that the coins would experience price hikes. They would then sell the units at a profit.
At this time, Ishan is scheduled to face trial after pleading not guilty, while Ramani is at large. Damian Williams – the top federal prosecutor in Manhattan overseeing Nikhil’s case – said in a statement:
Today’s sentence makes clear that the cryptocurrency markets are not lawless.
During his hearing, Nikhil showed remorse for his actions, claiming he did what he did as a means of helping his struggling parents. He mentioned:
I wanted to help my parents, but instead I put them through great suffering. I’m very sorry for what I did.