Armstrong Files to Sell $1.31 Billion of Coinbase After a $719 Million Profit That Is Mostly a Crypto Mark
Coinbase printed a $2.51 beat from a $715 million unrealized crypto mark while its CEO, co-founder and president filed plans to sell 13.6 million shares starting November 16. The GAAP number and the insiders' schedule arrived in the same filing.
Vincent Jiang · 2 min read
Brian Armstrong printed the best earnings headline of the quarter, then filed to sell about $1.3 billion of stock 23. Coinbase's−13.84% — Coinbase, down 13.84 percent today chief executive adopted a Rule 10b5-1 plan on August 12 to sell up to 8.17 million shares between November 16 and October 2027 23. That is the pre-set trading schedule an executive locks in while holding no inside information, which is why it can be disclosed weeks before the first sale. It is 2.2 times the 3.75 million shares his year-ago plan covered 2.
Co-founder Fred Ehrsam filed for up to 3.87 million shares and President Emilie Choi for up to 1.56 million 23. Together the three plans cover 13.6 million shares, about 6% of Coinbase's 223.7 million Class A shares, roughly $2.2 billion at Thursday's $160.59 close 2.
The $719 million is mostly a bitcoin mark
The same filing shows why the timing matters. Net income was $719 million, $2.51 a share, against forecasts of a loss 12. Under GAAP, the accounting standard whose rules let unrealized crypto gains into net income, about $715 million of that is a mark on the crypto Coinbase holds as an investment, worth whatever the tokens trade at next quarter 15. Adjusted net income was $78 million 1. Operating income, the profit from actually running the exchange, was $61.7 million, down from $480.5 million a year ago 2. Revenue fell 35% to $1.22 billion 1.
Of $719 million of Q3 net income, $715 million is an unrealized crypto mark
Data
| Value | |
|---|---|
| Net income | $719M |
| Crypto gains | $715M |
| Adjusted NI | $78M |
| Operating inc. | $61.7M |
Those gains come from coins Coinbase owns, not fees from customers, and the coins' price answers to the Fed. Bitcoin rose 39% during the quarter 7. But the Fed held rates at 3.75% to 4% on October 28 in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting for another hike, and traders put 82.6% odds on a December hike 6.
A hawkish Fed drains appetite for risky assets, the force that left COIN down 4.6% at $153.28 premarket on October 30, 57.6% below its $361.40 high, as the Binance breach hit the sector 5.
A $1.96 billion buyback is the only backstop for 13.6 million new shares
Each plan sells only above undisclosed price thresholds, and Coinbase permits insider trading only through these schedules 2. Armstrong himself says the market is turning, pointing to prediction markets that have passed $200 million in annualized revenue 1. Fair enough.
The proof is dated. Coinbase's $1.96 billion of buyback authorization is the only standing buyer of the supply, and the Form 4 filings, the SEC documents that reveal each insider sale after it happens, will show from November 16 whether the sellers clear their undisclosed price thresholds before the mark erodes 2.
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