Coinbase Investors Applaud Layoffs: Is The Stock Turning Around, Or Does Bitcoin 'Have A Date With $10K'?

Zinger Key Points
  • Co-host Dennis Dick has a bad taste in his mouth from previously investing in Coinbase.
  • “I think that Bitcoin eventually has a date with $10,000, and for that reason, I am avoiding the issue," he says.

As more and more technology companies announce layoffs, the investor reaction to the job reductions has been mixed. The latest company to announce layoffs is Coinbase Global Inc (NASDAQ: COIN), which is Tuesday's PreMarket Prep Stock of the Day.

Coinbase Sells From Day 1: On its first day of trading on April 14, 2021, Coinbase opened at $381, rallied to its all-time high ($429.54) and crumbled to end the session at $328.28. Unfortunately for shareholders, it only exceeded that closing price twice over the next three sessions and then embarked on a historical decline.

Coinbase's Double Bottom: As investors piled out of the issue in late December 2022, to at least reap some tax benefits from their losses, they nudged the issue to an all-time time low of $31.83.

The issue did rebound as high as $38.50 before revisiting that low Friday, when it bottomed at $31.55 and rebounded to close at $33.26.

As the investor appetite for beaten-down growth stocks improved Monday, the issue had one its best sessions in quite some time, rallying $5.01, or 15%, to close at $38.27,

More Coinbase Layoffs: Last June, Coinbase announced the elimination of 1,110 jobs or approximately 18% of its global workforce.

On Tuesday, the company announced the layoff of another 950 workers, or 20% of its workforce. As a result, the company will Incur $149-$163 million in total restructuring expenses. 

CEO Brian Armstrong blamed the economic climate and crypto market.

PreMarket Prep's Take On Coinbase: When the issue was being covered on the show Tuesday, it was trading slightly in the red at $38.18.

Co-host Dennis Dick had a bad taste in his mouth from previously investing in the issue.

“I took a huge loss in the issue, buying it $200 and dumping it at $80,” he said.

“I think that Bitcoin eventually has a date with $10,000, and for that reason, I am avoiding the issue.”

The author of this article alerted investors the market was taking the layoffs in stride and the issue was not deep in the red.

For investors looking to go long the issue, clearing the closing price ($38.27) may lead to a sustained move higher.

COIN Price Action: After a lower opening Tuesday, Coinbase immediately bottomed at $37.74 and began to move higher.

In a wild first 10 minutes of the session, the issue roared past its closing price, exceeded Monday’s high ($39.38), rallied to $42.40 and reversed course.

That just exceeds its Dec. 14 high ($41.90) and is well shy of its Dec. 13 high ($46.33). As of 1:45 p.m. EST, Coinbase is attempting to remain in the $41 handle.

The Coinbase discussion from PreMarket Prep can be found here:

Photo via Shutterstock. 

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