Coinbase Stock Pulls Back, With Earnings Looking Solid

Coinbase stock price retreated 5.2% on the day, making a 5 day cumulative dip of 12.59%, despite bit beats on EPS and revenue.

The firm's financial performance has been under the microscope, with Wall Street analysts forecasting a quarterly Earnings Per Share (EPS) of $0.88 for the crypto firm, significantly beaten by actuals of $1.33. Revenues were anticipated to double to $1.36 billion, which Coinbase also beat with actuals of $1.45bn.

This is not entirely unexpected behaviour for COIN, a stock that trades in volatile fashion, charting a similar path as Bitcoin. Over an elevated time horizon, Coinbase share price has gained 135% in the past 12 months, whilst BTC has added 121%. The gains seen in the stock could also make up part of the reason for a recent sale by Ark, in a broader rebalance of the portfolio as the holding grows in value, and proportionate size.

Ark Invest, the investment firm managed by Cathie Wood, made headlines recently for its decision to offload a significant portion of its Coinbase (COIN) holdings just ahead of the cryptocurrency exchange's second-quarter earnings report. The firm sold 12,077 Coinbase shares, worth approximately $2.7 million.

This move comes as Coinbase has consistently exceeded analysts' revenue expectations over the past six quarters, raising questions about Ark's decision to reduce exposure before the latest earnings reveal. As it turned out, COIN beat big on EPS and revenue, yet the stock has pulled back regardless.

The trading activities of Ark Invest are often subject to intense scrutiny, given the firm's high-profile status and Wood's reputation for disruptive innovation investments. Was this a strategic move to allocate towards other growing tech sectors, a move as Bitcoin failed to surpass $70,000, or even a loss of confidence in Coinbase's near-term growth potential?