Meta drops 15% on weak outlook and high AI and metaverse spending

April 24, 2024 Coin Telegraph

Coinbase shares hit 18-month high after Binance charges

November 27, 2023 Coin Telegraph

Binance

The price high comes after rival exchange Binance pleaded guilty and traders seemingly priced in Coinbase’s custodian agreements for a slate of spot crypto ETFs.

Crypto exchange Coinbase (COIN) shares have hit an 18-month high after rival exchange Binance and its former CEO Changpeng Zhao pleaded guilty to money laundering and sanctions violations in the United States.

On Nov. 27, Coinbase closed at $119.77, its highest since May 5, 2022, when it closed at $114.25, according to TradingView data. It has seen little movement in after-hours trading.

The number puts Coinbase shares up around 256.5% year-to-date, although is still down 65% from its Nov. 12, 2021, all-time high of nearly $343.

*Coinbase share price since May 2022. Source: TradingView*

Coinbase’s share surge comes just shy of a week since Binance and founder Changpeng “CZ” Zhao pleaded guilty to money laundering, violating U.S. sanctions and running an unlicensed money-transmitting business.

Zhao and Binance settled with the U.S. for $4.3 billion, which included Zhao stepping down as CEO and Binance agreeing to DOJ and Treasury compliance monitors for up to five years.

Over the past year Coinbase has also secured a significant windfall with to-be-approved U.S. spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs).

Analysis from Bloomberg ETF analyst James Seyffart shows Coinbase is custodian to 13 of the 19 spot crypto ETFs currently pending with the Securities and Exchange Commission.

*Coinbase is the custodian of 70% of the 19 spot crypto funds. Source: James Seyffart/X*

Coinbase, however, faces a lawsuit from the SEC which claims the exchange didn’t register with the regulator and listed several tokens that violated U.S. securities laws.

Coinbase had attempted to dismiss the suit and called into question the SEC’s authority to police crypto.

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Coinbase share price spikes 7.9% as Q1 results beat expectations

May 5, 2023 Coin Telegraph

Coin Telegraph

Coinbase CEO Brian Armstrong called the quarter a "turning point" for the company as it worked towards a more "financially disciplined" firm.

Crypto exchange Coinbase managed to significantly narrow its net loss in the first quarter of 2023, due in part to robust earnings from retail investor trading activity.

The company’s net loss fell from $557 million in Q4 2022 to $79 million in Q1, partly attributed to a 22% increase in revenue to $736 million.

The results beat expectations from some analysts, leading to a 7% spike in Coinbase’s (COIN) share price in after hours trading.

Coinbase’s (COIN) share price. Source: Google Finance.

Transaction revenue — derived from fees its charges for trades — from its institutional base increased a whopping 66% to over $22.3 million, while transaction revenue from retail investors increased14.1% to $352.1 million, according to Coinbase’s May 4 shareholder letter.

Overall, revenue from transactions increased 16% quarter-on-quarter to $375 million, though trading volumes remained fairly flat.

Interest income and blockchain rewards from staking brought in the most revenue for the quarter, which increased to $240.8 million and $73.7 million respectively from Q4 2022.

*Coinbase’s revenue for the first quarter of 2023. Source: Coinbase*wo 10 / ch 66

The percentage of revenue from Bitcoin (BTC) (36%) and Ether (ETH) (18%) trades remained almost identical over the quarter.

The firm is inching closer to profitability following a tumultuous 2022 which saw overall net losses of $1.16 billion, $803 million, $576 million and $605 million across each respective quarter last year.

Coinbase explained that the quarter represented a “turning point” towards building a more “efficient” and “financially disciplined” firm:

“We reduced costs, doubled down on operational excellence and risk management, and continue to drive product innovation and regulatory clarity. Our efforts are showing meaningful progress.”

“Our teams are smaller, but more nimble than ever and we are pleased with the pace of innovation and the results we are seeing,” the firm added.

Coinbase cut staff by 18% in June, 2022 and then another 20% in January, 2023 in order to ensure the firm maintains an appropriate level of “operational efficiency,” Armstrong explained.

Coinbase’s comments were made in light of the Wells Notice hanging over their heads from the United States Securities Exchange Commission (SEC):

"We see this as an opportunity to continue pushing for a clear rule book in the US for crypto regulations."

The firm said it is "heartened" to see more bi-partisan support for incoming crypto legislation and hopes to play a role in advocating for a rules-based industry.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

Metaverse division’s $4B loss drags on positive first quarter for Meta

April 27, 2023 Coin Telegraph

<div>Metaverse division's B loss drags on positive first quarter for Meta</div>

Augmented Reality

Zuckerberg expects Reality Labs operating losses to increase year-over-year in 2023.

Meta suffered a nearly $4 billion loss from its metaverse unit with Reality Labs in what was otherwise a solid first quarter for the Mark Zuckerberg-led social media empire which posted a final profit of $5.7 billion.

While the $4 billion loss follows a $14 billion loss in 2022, Zuckerberg explained in the earnings report that Reality Labs will likely suffer more losses in the remainder of 2023.

“We continue to expect Reality Labs operating losses to increase year-over-year in 2023,” predicted Zuckerberg.

Meta’s metaverse-focused Reality Labs unit suffered another big loss. Source: Meta

The losses suffered by Reality Labs were however negated by the firm’s developments in its artificial intelligence (AI) segment, the firm’s chief executive explained.

"Our AI work is driving good results across our apps and business. We're also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision.”

While Zuckerberg recently labeled AI as the firm’s “single largest investment,” he said Meta’s metaverse ambitions remain a top priority for the firm.

“A narrative has developed that we're somehow moving away from focusing on the metaverse vision, so I just want to say up front that that's not accurate." he said before adding, "we've been focusing on both AI and the metaverse for years now and we will continue to focus on both.”

In addition, Zuckerberg explained that metaverse tech will help its AI visions and vice versa.

“Metaverse technology will also help deliver AI as well. For example, embodying AI agents will take advantage of the deep investment that we’ve made in Avatars over the last several years.”

Zuckerberg explained in a Feb. 28 Facebook post that the firm is building a suite of creative and expressive tools that can help “turbocharge” the efficiencies of some of its existing products:

“Over the longer term, we'll focus on developing AI personas that can help people in a variety of ways. We're exploring experiences with text (like chat in WhatsApp and Messenger), with images (like creative Instagram filters and ad formats), and with video and multi-modal experiences.”

Though Zuckerberg stated the firm has “a lot of foundational work to do” before it can provide “really futuristic experiences” for its audience.

Meta stock bounced 11.7% after hours following the news of its better-than-expected first quarter, according to Google Finance: