5 Investors Betting Big on COIN Stock Amid Coinbase Layoffs

  • Coinbase (NASDAQ:COIN) announced that 18% of its full-time workforce will be laid off.
  • This is just the latest layoff announcement from a major crypto company.
  • Still, several big investors are still betting on COIN stock.
COIN stock - 5 Investors Betting Big on COIN Stock Amid Coinbase Layoffs

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This morning, Coinbase (NASDAQ:COIN) CEO Brian Armstrong announced that 18% of the company’s full-time workforce would be laid off. The cryptocurrency brokerage currently employs roughly 5,000 full-time workers, so around 1,100 people will be laid off. Armstrong attributed the layoffs to several factors, such as the decline in the cryptocurrency market, managing expenses and deteriorating economic conditions. He also admitted that the company “grew too quickly.”

Armstrong added in a blog post, “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly.”

Meanwhile, Coinbase’s team has grown by more than 4X in the past 18 months. At the beginning of 2021, the company employed 1,250 employees. During that time, the crypto market was in the “early innings of the bull run and adoption of crypto products was exploding.”

Armstrong also cited the need to increase efficiency as one of the factors for the layoffs. He stated that additional employees no longer increase efficiency or productivity and that employee costs are too high to manage in an uncertain market.

Coinbase isn’t alone. On Monday, crypto companies Blockfi and Crypto.com announced layoffs as well. Blockfi will part ways with 20% of its workers, while Crypto.com will lay off about 5% of its staff.

Still, COIN stock carries significant ownership from several institutional investors.

5 Investors Betting Big on COIN Stock

Tracking institutional ownership is very important, as these large funds provide liquidity and price support for stocks. Armstrong remains Coinbase’s largest shareholder with 38.68 million shares, followed by co-founder Fred Ehrsam with a 18.35 million share stake. However, it should be noted that the two co-founders’ positions are only accurate as of Q4 of 2021.

During Q1, 751 funds reported owning COIN stock, a decrease of 108 funds from the prior quarter. That isn’t exactly comforting. On top of that, the total number of shares owned by institutional investors who file a 13F form is 78.01 million, down about 9% from Q4. Furthermore, the institutional put/call ratio lies at 1.01. This signifies that funds own around the same amount of put options on the company as call options. With that in mind, let’s take a look at the five largest institutional shareholders:

  1. Andreessen Horowitz: 14.86 million shares. Andreessen’s position is only accurate as of Q4 of 2021.
  2. AH Equity Partners: 10.86 million shares. AH’s position remained unchanged during Q1.
  3. Ark Investment Management: 8.04 million shares. Ark last purchased 15,220 shares of COIN on June 1.
  4. Vanguard Group: 6.02 million shares. Vanguard purchased 260,538 shares during Q1.
  5. Morgan Stanley (NYSE:MS): 5.14 million shares. Morgan Stanley purchased 721,881 shares during Q1.

On the date of publication, Eddie Pan 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.


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