Suggested as a SHORT SALE on March 27, 2022, at $75.32, Coinbase Global, Inc. (COIN) now $40.96 and still above the target COVER of $25.00, our G-101 Algorithm remains negative on the symbol.
Conforming our view is today's announcement:
Coinbase Global discloses that FY22 Adjusted EBITDA is expected to be within the negative $500 mln loss guardrail that the company provided in the shareholder letter; also announces further restructuring plan; will eliminate 950 jobs (38.27)
Co announced certain preliminary unaudited financial and operating results for its year ended December 31, 2022. The Company expects to report Average Annual MTUs, Average Transaction Revenue Per User, and Subscription and Services Revenue, as well as certain operating expenses - comprising Transaction Expenses, Sales and Marketing Expenses (including stock-based compensation), and Technology and Development + General and Administrative Expenses (including stock-based compensation) - to be consistent with the Full-Year 2022 Outlook provided in its November 3, 2022 letter to shareholders. As a result, Adjusted EBITDA for the full year ended December 31, 2022 is expected to be within the negative $500 million loss guardrail that the Company provided in the Shareholder Letter.
The Company further announced that it expects certain of its operating expenses - comprising Sales and Marketing Expenses, Technology and Development + General and Administrative Expenses, including stock-based compensation and excluding restructuring expenses and Other operating expenses, net - for the quarter ending March 31, 2023 to be approximately 25% lower than those operating expenses for the quarter ended December 31, 2022. This is the result of ongoing cost management initiatives, including the Plan.
On January 10, 2023, the Company announced a further restructuring plan to manage its operating expenses in response to the ongoing market conditions impacting the cryptoeconomy, as well as ongoing business prioritization efforts. The Plan involves a reduction of the Company's workforce by approximately 950 employees. The Company expects execution of the Plan to be substantially complete by the second quarter of 2023.
In connection with these actions, the Company estimates that it will incur approximately $149 million to $163 million in total restructuring expenses, consisting of approximately $58 million to $68 million in cash charges related to employee severance and other termination benefits. Of the aggregate charges that the Company expects to incur in connection with the Plan, the Company expects that approximately $91 million to $95 million will be in stock-based compensation expenditures relating to the acceleration of the vesting of outstanding equity awards in accordance with the terms of such awards. The Company expects to recognize substantially all of these charges in the first quarter of 2023.
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