If we look at the share price of Coinbase (NYSE:COC), survival seems assured, at least temporarily. In any case, the share certificates have recently recovered to over 85 euros. Since the low of 40 euros, this corresponds to a strong price increase. Yes, even a doubling after the stock lost more than 80% of its market value in the meantime.
In any case, an analyst has now brought the survival setting at Coinbase into play. Let’s look at his position, which on balance is quite relevant. By the way: It seems possible, despite crypto winter and other disappointing events.
Lisa Ellis, a partner at MoffettNathanson, has now floated this thesis regarding Coinbase. The reason for this is the weak quarterly figures, in which the crypto trading platform had to report a net loss of USD 1.1 billion. Accounting impairments from crypto investments also cost $453 million. At least temporarily, which of course can change when the assets recover.
But back to the topic at hand: According to Ellis, Coinbase owns $5.68 billion in cash and short-term assets. This means that the company and the crypto platform can certainly survive the crypto winter and other market-related difficulties. It is a stable basis to master the difficult times. Finally, there would also be 500 million US dollars in a stable coin, which could also be counted as liquidity.
For Ellis, there is therefore sufficient liquidity to be able to endure classic schemes in something like the current crypto winter. In their view, the market (statistically speaking) will continue at a similar level for another six quarters before there is an improvement. With the current cash burn rates, it is very likely that there will be sufficient liquidity.
Other questions are also relevant
According to the analyst, Coinbase can therefore survive the crypto winter. That is definitely good news. Overall, we see a solid situation in terms of liquidity. This is an advantage, especially in order to be able to master difficult market situations and slumps.
Nevertheless, the management also has to solve other construction sites. Competition, less market share and operational problems with strategic question marks are part of it. However, survival is the basic element of a possible turnaround. Everything else only time will tell. Whereby the management can afford the luxury of not remaining in hibernation mode, but can work directly on a strategy for better times.