Is Coinbase a Bad News Buy Right Now? @themotleyfool #stocks $COIN $LUNA $UST - Aliens: AI Crypto News & Markets Updates
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Is Coinbase a Bad News Buy Right Now? @themotleyfool #stocks $COIN $LUNA $UST

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The Motley Fool

Sat, May 14, 2022

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Aliens TLDR

Coinbase Global ( COIN 16.02%) stock tanked hard after a disappointing first-quarter earnings call.

Higher expenses and lower revenue can do that to a growth stock in a bull market but the timing for Coinbase's latest call couldn't have been worse.

Coinbase's management team presented disappointing first-quarter results while the algorithmic stablecoin TerraUSD ( UST 94.45%) and its sister token Terra ( LUNA 745.44%) were collapsing in spectacular fashion .

Tools for buying, selling, and storing crypto on its platform are how Coinbase got started, but this business wants to be a lot more than just a currency exchange.

Revenue not related to trading could jump again the next time Coinbase reports.

Coinbase should be commended for rapidly diversifying away from retail crypto trading, but it's still a big part of the business.

The failed stablecoin also pours cold water on Coinbase's plans to tap revenue streams that don't depend on frenzied crypto traders and the fees they're increasingly hesitant to pay.

Coinbase has been investing heavily into diversifying its business and a majority of the company's 4,948 employees at the end of March have been on the job for less than a year.

Coinbase passes this test with an $889 million gross profit in the first quarter against operating expenses that came in at $579 million a year ago.

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