🤔Both stocks trade on Bitcoin, and both report after the close today. Here's the gap in the numbers I'd look at first.
Here's what doesn't add up for me. Crypto had a strong third quarter, yet one of its biggest public names is expected to report a loss. 📊
📊 The Setup
Coinbase reports Thursday, October 29, after the US market close. Analysts expect a loss of about $0.18 per share on $1.20 billion in revenue. That revenue figure is 35.6% below the $1.87 billion from a year ago.
Strategy reports the same evening. It already estimated a $20.91 billion Bitcoin gain for Q3 on 847,666 BTC held, but that number is unaudited. Tonight is the first time the reviewed figure appears.
📈 Why It Looks Odd
Total crypto market cap rose 39.6% in the quarter, and Bitcoin closed September at $83,554 against $58,559 at the end of June. Prices jumped, but Coinbase earns from activity, not price.
That's why the headline loss matters less than the pieces underneath. The stock reaction depends on transaction revenue, subscription and services revenue, and what management says about October.
🔄 Coinbase's Recent Track Record
Coinbase has missed revenue expectations three quarters running. Last quarter it reported a loss of $1.36 per share against an expected loss of $0.44. Consumer transaction revenue fell 20% year over year to $452M in Q2.
The stock's reaction was messy too. It fell 10.59% on earnings day, then gained 20.89% over the following 30 days. The first move wasn't the whole story.
🧱 The Other Side
The bar is low. A smaller loss or better October trading commentary could surprise the market. Strategy's call may matter more than its EPS, because its earnings swing with the price of Bitcoin. Its numbers rise and fall with the coin's price, so the call may tell investors more than the EPS figure.
⚠️ The Risk
A fourth straight revenue miss would reinforce the idea that this rally isn't translating into real trading activity. Also, this comes right after a Fed that held with December hike talk, and risk assets are already sensitive to anything that looks weak.
I wouldn't read one report as a verdict either way.
👀 What I'm Watching
Does Coinbase's transaction revenue beat the low bar?
What does management say about October activity?
Does Strategy's reviewed Bitcoin gain match the $20.91B estimate?
💡 Bottom Line
Crypto went up in Q3, but the earnings numbers may not show it. The headline loss won't tell you much. The revenue mix and the October commentary will.
That's the part worth watching.
This post is for informational and educational purposes only and is not financial advice. Crypto markets are volatile. Always conduct your own research before making financial decisions.
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