Coinbase Global Inc (NASDAQ: COIN) traded lower last week after reporting weak third-quarter financial results.
What Happened: Coinbase reported quarterly earnings of $1.62 per share, which beat the estimate of $1.56 per share. The company reported quarterly revenue of $1.24 billion, which came in below the estimate of $1.57 billion.
Coinbase said verified users grew to 73 million in the third quarter, while monthly transacting users were 7.4 million. Trading volume was $327 billion, down from $462 billion in the second quarter.
“We believe that retail MTUs and total trading volume will be higher in Q4 as compared to Q3,” Coinbase said in a letter to shareholders.
Why It Matters: Hightower Advisors’ Stephanie Link took advantage of the pullback and bought Coinbase shares. The company guided higher in its earnings report and she said it was largely ignored.
“I thought that 10% dip last week was a buying opportunity,” Link said Friday on CNBC’s “Fast Money Halftime Report.”
Coinbase is the largest and most secure cryptocurrency exchange, and the company is the leader in the crypto industry, Link said: “I think 25 times earnings for the industry leader is a good buy.”
The total addressable market is “huge” and is expected to triple by 2030, she said.
“It’s hard to ignore companies that are investing in crypto,” Link said.
It’s not just PayPal Holdings Inc (NASDAQ: PYPL), Square Inc (NYSE: SQ) and Tesla Inc (NASDAQ: TSLA) that are investing in crypto, she said, adding that other big name companies doing so include Coca-Cola Co (NYSE: KO), Starbucks Corp (NASDAQ: SBUX), Visa Inc (NYSE: V) and Expedia Group Inc (NASDAQ: EXPE).
“That’s very telling,” Link said. “So I wanted to have some exposure.”
COIN Price Action: Coinbase has traded as high as $429.54 and as low as $208 since its direct listing on April 14.
The stock was up 2.78% at $332.55 at the close Friday.
Photo: courtesy of Coinbase.
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