Coinbase (COIN) Trades at 'Stratospheric Valuation' Says Jim Chanos - CNBC

Speaking to CNBC on Tuesday, famed short-seller Jim Chanos, who in March said he was betting against Coinbase (NASDAQ: COIN), said the cryptocurrency exchange's services and subscriptions are not growing.

Chanos previously said he expected fees to be compressed as competition in the crypto trading space increased. However, Coinbase CEO Brian Armstrong said to date, they haven't seen fee compression.

Reacting to Armstrong's response, Chanos said the scary thing about the story is that we have not yet seen retail fee compression at Coinbase.

"In fact, their actual dollars per transaction on the retail side was up year-over-year slightly," Chanos told CNBC's Halftime Report. "That compression is still ahead of them."

"The problem, of course, is that volumes have dropped," he added. The short seller referred to the Street revenue estimate being cut from $7.4 billion in March to $3.5 billion now.

"On a revenue basis, even though the stocks been cut in half, so has the revenue estimate," explained Chanos. "This is still an incredibly expensive stock for a company that...let's be clear, is losing a billion dollars a quarter."

"Services and subscriptions was $147 million in the second quarter...that's been flat for four quarters, it's not growing."

Chanos said the issue for the company is that almost all the drivers are under pressure, and the stock trades at a "stratospheric valuation" relative to other broker-dealers such as Robinhood.

"The tangible book value at Coinbase is about $20 per share, but it's going down at the rate of 4 or $5 a share per quarter so Coinbase is going to have a tangible book of about $10 at the end of the year," he claimed.

Coinbase shares are up 0.5% Tuesday.

By Sam Boughedda

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