Coinbase : Outages, Hiring Stop And Plunging Stock
Last Updated on 19 May 2022 by CryptoTips.eu
As US stock markets continue their slide, we take a closer look at technology stocks related to crypto. Today we discuss Coinbase.
Last year in April, Bitcoin surged on the news of the Coinbase IPO. The biggest American crypto exchange was to be introduced to the stock market and digital coins would finally go mainstream. The New York Times called it a ‘landmark moment’ for cryptocurrency.
CEO Brian Armstrong did a tour of all the major television networks and all seemed rosy. Bitcoin itself traded for over $60,000.
One year later and Coinbase stock is trading at it’s lowest level ever, there are reports of repeated outages, the board has decided to stop hiring new staff and Armstrong is in full damage control mode.
Hiring stop
With technology stocks taking a beating and Bitcoin having lost some 50% since it’s all time high of $69k, it is no surprise that technology major Coinbase warned staff of a slowdown in hiring. With that, they followed a similar move as announced by Uber, Facebook and Robinhood.
Coinbase slows hiring as chill in crypto markets hits exchange https://t.co/lpXfRDuSWU
— Financial Times (@FT) May 17, 2022
Emilie Choi, Coinbase’s chief operating officer, explained to personnel that
Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals.
Headcount growth is a key input to our financial model, and this is an important action to ensure we manage our business to the scenarios we planned for.
Admitting the ‘difficult’ period the platform faced, the stated furthermore that the board knows:
This is a confusing time and that market downturns can feel scary. But we plan for all market scenarios, and now we are starting to put some of those plans into practice.
Well, that’s one way to stop the bleeding, you could say, but what else is going on?
Outages
For one, there have been numerous reports of outages, with Reddit users slamming the site for not allowing them to withdraw their funds when markets are volatile. In a wide-ranging article in The Verge last week, users were quoted saying: “Has the bear market crashed their servers? Pretty frightening if someone wants to make a fast trade.”
https://twitter.com/val5linx/
Responding to the criticism during the market falls of several altcoins last week, Coinbase said: “We are aware that some customers are having issues trading and accessing accounts on Coinbase and Coinbase Pro. Your funds are safe, and we are actively working on the issue. We’ll provide an update here soon.”
Kiss of death
Also not good. Lastly, let’s take a look at the stock.
Coinbase traded for some $400 on the day of it’s IPO, but has never been able to maintain that price since then.
Last week, when they announced the results of a staggeringly bad first quarter, the price of their stock dropped to the low $50s, which was the exact moment that Cathie Wood, whose Ark investment fund has also been getting hammered this year, decided to purchase about half a million shares.
Jim Cramer, the famed market commentator, referencing the demise of General Motors, called it the proverbial kiss of death for Coinbase. Tweeting in response, he stated: oh my, like the GM kiss of death, Cathie Wood buys another 550,000 Coinbase….
https://twitter.com/jimcramer/
Let’s see in a few months whether or not he was right.
