BYD, Globex Mining, Coinbase - New opportunities after the price storm

Coinbase - Forecasts exceeded

Even Bitcoin, which has soared to new heights in recent weeks and tested the USD 70,000 mark, could not escape the poor overall market sentiment. The world's largest cryptocurrency lost around 11% in the past week. Crypto-mining companies like Riot Platforms, Hut8 and Marathon Digital suffered even greater losses. These companies, which typically outperform the underlying asset during a potential trend reversal, have a significant support level around the USD 60,000 mark.

The figures from crypto exchange Coinbase, which moved well into the black in the second quarter, showed that the past few days are only a correction in the current upward cycle and that companies in this sector are capable of sustainable gains. While losses of USD -0.42 per share were recorded in the same quarter of the previous year, earnings per share were USD 0.15 in the second quarter of 2024. However, analysts were expecting significantly higher earnings of USD 0.93 per share.

In terms of revenues, Coinbase beat the forecasts of financial experts. Here, the Company generated USD 1.45 billion, which exceeded the estimates of USD 1.4 billion. This represents a significant increase compared to the same period of the previous year, in which only USD 797.91 million was generated.

Challenging times lie ahead for management in the third quarter. "We expect slight headwinds due to a decline in the price of the cryptocurrency Ethereum and rising costs associated with promoting wider use of USDC, a stablecoin pegged to the US dollar. This stablecoin could become increasingly important to the exchange's crypto trading infrastructure."

Additional hiring and increased development and marketing expenses are also expected to impact financial results.

Globex Mining - Share buyback program renewed

In contrast to the equity market, the gold price closed the past trading week in the green and remained stable above the USD 2,440 per ounce mark despite profit-taking following the labour market data. Due to the increasing tensions in geopolitics, the precious metal will likely continue to be used as a safe haven.

One company that is clearly benefiting from this is the commodities incubator Globex Mining, which industry veteran Jack Stoch has managed since the 1980s. The broadly diversified portfolio has a total of 252 holdings, including 126 projects containing the precious metals gold, silver, platinum and palladium alone. The debt-free company, which holds over CAD 25 million in cash and marketable securities, generates a steady cash flow by receiving royalty payments from option and joint venture partners on 118 properties currently under option.

In addition, Globex Mining invests between CAD 2 and 3 million annually in the development of its own promising projects, all of which are located in prime locations, primarily in North America. The properties include 40 former mines and over 50 projects with historical and/or NI 43-101 compliant resources.

The favourable valuation of CAD 51.123 million prompted management, which itself owns 13.07% of Globex Mining, to renew the share buyback program for up to 1 million shares. At CAD 0.90, the share is a long way from the all-time high of CAD 7.76 reached in December 2006. However, the positive development regarding the aggressive expansion of assets gives the Company significant upside potential.

BYD - Strong news, weak share price

The recent share price losses have significantly shaken the previously positive chart of the Chinese market leader BYD. The share price of the Company, co-financed by Warren Buffett, broke below the upward trend established at the end of January 2024, triggering further sell orders. At USD 27.90, BYD is trading only marginally above the next support area at USD 27.15.

A further slide will likely take the share into the USD 25 range. On the upside, the technical situation would only brighten above the resistance area at around USD 30. The current negative trend in the indicators speaks against this. The trend follower MACD has not yet been able to form any positive divergences and is still set to "Sell". At 38.22, the relative strength index RSI still has room to fall.

The fact that two pieces of positive news were ignored last week also indicates further declining prices. Firstly, a new sales record was set in July with 342,383 vehicles. Secondly, the Shenzhen-based company announced a cooperation with the ride-hailing service Uber, which intends to add around 100,000 BYD vehicles to its platform globally. The vehicles are initially intended for Europe and South America and will later be introduced to Canada, Australia and New Zealand.

In the course of the correction in recent trading days, the crypto exchange Coinbase recorded losses despite convincing figures. BYD's technical chart situation is tense and could not be improved even by positive sales figures. Globex Mining is taking advantage of the favourable valuation by renewing its share buyback program.