Is Coinbase Going Bankrupt?
Flaws and Sins
This is probably a question in most concerned investors' minds, from exchange users to share holders, whichever category it may be, there's quite the tension surrounding the company's future. Considering the comments that have filled the air regarding the company's executive team members, citing different points of failures in product management and development, business planning and protection of the company's interest, coinbase has had its stock price fall over 23% in the last 5 days.
We, the employees at Coinbase, believe that the executive team has recently been making decisions that are not in the best interests of the Company, its employees, and its shareholders. COO Emilie Choi, CPO Surojit Chatterjee, and Chief People Officer LJ Brock have been the most prominent executives who have been executing plans and ideas that have led to questionable results and negative value.
As read above, a couple of coinbase employees have laid out concerns over company's executive team, "publicly", bringing to the open a list of negative value results followed by the decisions made by this team. This includes;
The failure of the Coinbase NFT platform, over-prioritization of certain products, which as observed by the employees, has led to a lack of focus on other important issues like infrastructure. Employees also cited the toxic workplace culture, which was a product of the ill planned Initiatives like the Dot Collector and the Performance review system.
Aggressively hiring for thousands of roles was also amongst the list of the many points of planning failures, this with unpaid attention to the fact that it is unsustainable and highly contrary to the operating patterns of the crypto industry.
Employees also cited the parties affected by the decisions made by the team and can be found here. This of course didn't go down well which led to coinbase's Brian Armstrong thread response on twitter.
Coinbase Lost about -77.79% on its stock value over a period of one year!
As seen above, the most coinbase stock depreciation occurred in the last 3 months with the stock losing over 69% of its value. Judging by the current nature of the financial markets, it creates worries that these prices may not even sustain and investors are liable to lose even more money on the company stock.
Considering coinbase first-quarter earnings report—in which the U.S.'s largest public cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users. According to reports;
Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.
However, Brian Armstrong has taken to twitter that the company has no risk of bankruptcy, adding that the above included risk factor is based on the new SEC requirements called SAB 121, which requires a disclosure by public companies that hold crypto assets for third parties.
With all the above points, Coinbase is however not looking to be the best investment choice and risks going bankrupt if immediate solutions are not provided. Nonetheless, this is not investment advice, do your own research…
Posted Using LeoFinance Beta