- Coinbase (NASDAQ:COIN) is up more than 13% after sending a note out to employees yesterday
- The company is slowing down hiring this year as crypto sees a wide downturn
- Coinbase saw its share price plunge last week after a disappointing first-quarter earnings call
Coinbase is on the rise today after company leadership announced that it will slow down on hiring new employees. COIN stock closed up more than 13% on a strong day for financial markets.
On Monday evening, Coinbase President and COO Emilie Choi sent out a public note to employees updating them on the company’s new hiring plans. As per the note, current market conditions require the company to backtrack on its originally aggressive plans for the year. Coinbase had apparently hoped to triple the size of the company this year. The recent market slowdown has clearly put a fork in these expansion plans.
“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, specifically the potential Adjusted EBITDA we are aiming to manage to.”
Coinbase isn’t alone in this judgement call. Industry giants likes Amazon (NASDAQ:AMZN) and Meta Platforms (NASDAQ:FB) have each already stated plans to limit hiring going forward. Meanwhile, Carvana (NYSE:CVNA) leadership has announced plans to lay off about 12% of its workforce.
The number two crypto exchange by market capitalization, Coinbase has been on a downward spiral lately alongside the greater crypto market. Its earnings call last week did little to assuage investors’ concerns, either.
COIN Stock Jumps After Hiring Slowdown, Earnings Miss
Coinbase has felt the throws of an unkind market lately. Last week, the company released its earnings report for its fiscal first quarter ended March 31. The crypto exchange failed to meet analyst projections, reporting $1.17 billion in revenue compared to $1.48 billion expected. The company also announced a loss per share of $1.98 and a substantial decline in monthly transaction users.
Investors immediately abandoned Coinbase, leaving COIN stock down more than 20% within just a day of its earnings call. In fact, the stock has lost some 70% of its value just since March, alongside broader declines in the tech and crypto space. Bitcoin (BTC-USD) has also seen drops below $30,000 per coin in recent weeks, down more than 35% year-to-date (YTD).
With that said, Choi has reiterated the company’s strong position in the market — and the bright horizons awaiting the platform.
“Big picture: We know this is a confusing time and that market downturns can feel scary […] We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time […] [T]he best is absolutely yet to come for us.”
All told, today’s jump may come as reassurance for COIN stock investors. The company appears well-prepared to take necessary action in order to endure this cold streak.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.