Coinbase channels inner Buffett to inspire SEA domination

Opening Bell 🔔 is Tech in Asia’s free newsletter, which brings you the biggest news and latest trends around publicly listed Asian tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. Hello {NAME} When a company dives head first into an expensive expansion in the middle of what could possibly be the biggest market downturn in years, it will likely send shivers down the spines of countless investors. And yet that's exactly what Coinbase Global (COIN, NDAQ), the largest cryptocurrency exchange in the US, has been up to. In search of growth amid intensifying competition on home soil, Coinbase, whose shares fell to an all-time low in May, has set its sights on Southeast Asia. But as today’s Big Story points out, the platform will not enjoy a first-mover advantage in the region. It is clear that investors are spooked as Coinbase’s shares tumbled over 70% in the last six months, comfortably outpacing the broader market decline. Short-selling veteran Jim Chanos, who made a name betting successfully against corporate frauds like energy firm Enron, sees more pain ahead for the “tremendously overvalued” company. “Coinbase was not a call on crypto prices. It was a call on what we thought was a sort of ancillary predatory business model,” Chanos said in a [podcast]( recently. However, Coinbase CEO Brian Armstrong remains defiant, even channeling his inner Warren Buffett to claim that the firm is “greedy where others are fearful.” Buffett, the CEO of Berkshire Hathaway (BRK.a, NYSE), is a [vocal critic]( of cryptocurrencies. The legendary investor recently declared that he wouldn’t buy “all of the bitcoin in the world” for US$25. “Ironically, I've never been more bullish on where we are as a company,” the 39-year-old Armstrong said during Coinbase’s [earnings call]( in May. Coinbase, which has lost roughly US$50 billion since the end of its first day of trading in April 2021, last week extended an already-existing hiring freeze to rein in rising operating costs. The company has 4,948 full-time employees, ballooning from about 1,700 a year ago. In this week’s feature piece, Tech in Asia weighs the dangers and rewards of Coinbase’s mission to gain a foothold in Asia amid an ailing crypto market. -- Shravanth --------------------------------------------------------------- The Big Story Image credit: Timmy Loen [Coinbase’s Asian expansion - wrong time, wrong place?]( Coinbase’s plans to expand in Asia could backfire as the exchange weathers a battered share price and bearish crypto market. --------------------------------------------------------------- STOCKS TO WATCH Hot stocks, earnings reports, restructuring, activist investor pressure, and more. We feature the stocks that are likely to make big moves during the week. Image credit: 123rf.com 1️⃣ US giants in Asia: It’s been a busy week in the world’s largest continent for the titans of American business. Amazon (AMZN, NDAQ) has [called time]( on its nine-year Kindle venture in China as it plans to pull the e-book store out of the country by June 2023. Apple (AAPL, NDAQ), meanwhile, has [shifted]( part of its iPad production to Vietnam to address supply chain disruptions caused by China's zero-Covid policy. Microsoft (MSFT, NDAQ) appears to be in harmony with the Malaysian government, [teaming up]( with the country to put 80% of end-to-end government transactions online. 2️⃣ Taste test, but for EVs: Panasonic Holdings (6752, TYO) has [sent samples]( of its 4680 format electric-car battery to Tesla (TSLA, NDAQ) as it gears up to boost the production of power packs in North America. Mass production of the new battery, which is about five times bigger than what Panasonic now supplies, is set to begin in March 2023. US-based Tesla is the Japanese firm’s only customer for the new cells so far. The batteries are expected to help the EV maker lower manufacturing costs and improve vehicle range. 3️⃣ Beaten down but not broken: Meituan (3690, HKG) has [posted a 25% jump]( in quarterly revenue, showing resilience in the face of challenging macroeconomic conditions. New businesses such as ride-hailing and community commerce helped the Chinese firm beat revenue estimates. Nonetheless, the uptick in revenues marked the slowest pace of growth for the company in almost two years. See also: [As Grab shareholder lock-ups expire, is fresh round of selling imminent?]( --------------------------------------------------------------- 2 EYE-POPPING FACTS Tech in Asia scours the internet to bring you the head-turning numbers from the world of business. Image credit: Timmy Loen - [53%]( – That’s how much GoTo Group’s (GOTO, IDX) revenue grew in the first quarter of 2022. Its first earnings report as a public company was initially disappointing as operating losses widened more than 3x to US$455 million amid rising costs. But after bagging one of 2022’s biggest IPOs, GoTo group is in a healthy cash position to weather out any upcoming macroeconomic storm. The company’s shares rose around 16% last week. See also: [GoTo Group’s financial health in 4 charts]( - [US$200 million]( – What do you do when talks over a SPAC deal get dragged out but fail, anyway? You fill up your cash coffers, of course! And that's exactly what Traveloka did. The online travel major is set to raise US$200 million following its unsuccessful attempt at going public. The Indonesia-based firm, which had been valued at US$3 billion, was aiming for US$5 billion through the planned merger, which never materialized. Nonetheless, Traveloka still harbors ambitions of listing in the US this year. --------------------------------------------------------------- THE 1 YOU DIDN'T SEE COMING We spotlight the unusual, not-your-everyday kind of story that has got everyone talking and social media buzzing over the past week. Short sellers, job cuts, and a “super bad feeling” Image credit: Timmy Loen After going into something akin to a hibernation over the last decade as the bull market ran riot, the bears are now out in force. Fraser Perring, known for short-selling German payment firm [Wirecard]( has now [opened]( a short position on Sofina Group (SOF, EBR) - a key backer of India-based Byju’s. The edtech giant, which bagged a valuation of US$18 billion in its latest funding round, is one of Sofina Group’s top investments, but Perring says that Byju’s is “unsound” and “overvalued.” Also, has anyone noticed the word “layoffs” being thrown around a lot recently? Well, [Google Trends]( certainly has, and with good reason - as recessions loom around the world, job cuts are on the horizon. With liquidity and funding going up in smoke, Asian tech startups have given out over 111,000 pink slips. In [this premium visual story]( Tech in Asia keeps close tabs on the firms letting go of its employees in order to stay afloat. Even large companies are [feeling the strain](. Tesla CEO Elon Musk has a "super bad feeling" about the economy: Not only has the EV maker paused hiring worldwide, but it is also looking to slash 10% of its workforce. The US company had around 100,000 employees at the end of 2021. --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. 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