COIN already carries a steep 39% nine-month deficit
Crypto exchange Coinbase Global Inc (NASDAQ:COIN) shares are down 2.8% to trade at 187.57 at last check, after the company announced a surprise first-quarter loss of $1.49 per share on $1.41 billion in revenue, hurt by nearly $500 million in unrealized crypto investment losses tied largely to Bitcoin’s (BTC) decline. Coinbase also noted it will cut 700 jobs, or 14% of its workforce, as part of a broader restructuring effort.
No fewer than eight analysts cut their price targets in response, with Barclays landing the deepest cut to $107 from $140. What's more, short interest rose 11.3% over the last two reporting periods, and 25.20 million shares now sold short make up a notable 11.5% of the equity's available float.
COIN bounced back from last week's dip and is now testing familiar support from its 60-day moving average. The equity shed more than 39% in the past nine months, however, and is today pacing for its third loss in the last four sessions while also carrying a 17.1% year-to-date deficit.
What's more, COIN sports a 50-day call/put volume ratio of 2.40 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands higher than 99% of annual readings. An unwinding of this optimism could create additional headwinds for the shares.
Drilling down to today's options activity, 76,000 calls and 46,000 puts have crossed the tape so far, which is double the volume typically seen at this point. Most popular is the weekly 5/8 190-strike call, with new positions opening there and expiring after today's close.
Finally, Coinbase's Schaeffer's Volatility Scorecard (SVS) sits at a high 98 out of 100, indicating it has tended to exceed option traders' volatility expectations in the past year.