Ark Invest, the investment house led by Cathie Wood, bought a total of 546,579 shares of Coinbase on Wednesday, worth roughly $30 million, according to the firm’s daily trade information newsletter.

The purchase is spread out across the company’s three actively managed exchange-traded funds: Ark Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF).

Coinbase, America’s largest cryptocurrency exchange, released its Q1 earnings report on Tuesday, posting a quarterly loss of $430 million and missing on several other key metrics.

Following the report's publication, Coinbase’s stock plunged from $73 to $62 in after-hours trading on Tuesday, with the rout continuing with a 26% drop to as low as $53.72 at the closing bell on Wednesday.

Coinbase Shares Plunge After Company Misses Q1 Revenue, Posts $430M Loss

Coinbase released its earnings for the first quarter of 2022, and the results will do little to improve the dour mood in the crypto markets. The company disclosed that it pulled in $1.17 billion in revenue—well short of the $2.5 billion it took in Q4, and far below analysts' Q1 predictions of $1.5 billion. Meanwhile, Coinbase posted a quarterly loss of $430 million. The scope of the loss—its first as a public company—was also unexpected as analysts had predicted earnings would be close to breake...

Coinbase's earnings report also came amid a wider bloodbath across the crypto market, caused by the collapse of Terra's UST stablecoin.

Coinbase went public on the Nasdaq exchange through a direct listing in April 2021, with the company’s stock initially selling at $381.

'Fire sale prices'

On Wednesday, Coinbase CEO Brian Armstrong took to Twitter to quote the well-known venture capitalist Fred Wilson, saying that "markets are irrational in the short term but not over the long term,” and that sometimes they “offer fire-sale prices on the greatest companies in the world."

This way, Armstrong made it clear that Coinbase’s stock at around $50 could be seen as a bargain, with Ark Invest seemingly taking the hint.

 2022 Crypto Crash

'Fire Sale Prices': Coinbase CEO on Stock's 87% Decline Since 2021 Debut

Coinbase shareholders are reeling as the stock price fell about 30% on Wednesday, after the company posted earnings that widely missed analysts' expectations. The stock had already been subject to a widespread selloff due to a broader meltdown in the crypto markets, but Tuesday's earnings report caused it to tumble to around $50 in mid-day trading today. The current price reflects a staggering 87% drop from April of 2021 when Coinbase went public through a direct listing and shares briefly trade...

Meanwhile Wood, who is often praised for her stock-picking skills, compared the current state of disruptive technologies with the collapse of the dot-com industry in the 2000s, saying that “stocks sold off after the tech/telecom bubble because the "dream" would not become reality for 20-25 years.”

On the contrary, Wood reckons that “genomic sequencing, adaptive robotics, energy storage, AI, and blockchain technology are realities, their stocks seemingly in deep value territory.”

Whether Ark Invest’s bet on Coinbase stock will pay off remains to be seen, though.

Per a Reuters report, thanks to the strength of its portfolio of companies such as Zoom Video Communications Inc and Teladoc Health that rallied during the pandemic, ARK Innovation ETF outperformed all other actively managed U.S. equities in 2020.

However, as of the end of April 2022, Wood's ARK Innovation ETF was down 50% year to date, falling nearly an additional 8% on Wednesday. Next Generation Internet and Fintech Innovation are down 46% and 48% year to date, respectively.