Share this article
Coinbase, Robinhood Shareholders Face Significant Stock Dilution: JPMorgan
Like many publicly traded tech firms, Coinbase and Robinhood have offered employees generously amounts of restricted stock units as part of their compensation.
Updated May 11, 2023, 4:18 p.m. Published Jul 25, 2022, 6:19 p.m.
In this article
Shareholders of crypto exchange Coinbase (COIN) and brokerage platform Robinhood Markets (HOOD) face risk of higher share dilution stemming from restricted stock units (RSU) included in employee compensation plans, JPMorgan (JPM) said in a note to clients Monday.
The dilution could come at an unfavorable time for shareholders given that both stocks have suffered amid the global crypto price and equity market routs. Shares of Coinbase and Robinhood are down about 73% and 51% for the year to date, respectively.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
“Coinbase and Robinhood, like their tech-company peers, issue substantial equity to company employees allowing companies to both attract and incentivize employees while keeping cash compensation lower,” JPMorgan equity research analyst Kenneth Worthington said in a note to clients.
Given the sharp drop in share prices, JPMorgan expects Coinbase and Robinhood to lower employee equity grants via RSUs, though it still expects “share creep from RSU issuance will drive dilution to a still substantial 7% pace annually in coming years.” The bank estimates if that 7% pace were to persist for five straight years, it could reduce the value of each company to existing shareholders by 30%.
As crypto and equity markets remain under pressure, many public and private companies continue to embark on cost control efforts. In June, Coinbase said it was laying off around 1,100 employees, while Robinhood said it was cutting roughly 9% of its full-time workforce in April.
JPMorgan has a neutral recommendation on Coinbase, and is underweight on online brokerageRobinhood.
Despite these potential dilution concerns, many institutional investors, perhaps sensing an opportunity to purchase shares on the cheap, have recently been adding to their positions in Coinbase.
UPDATE (July 25, 18:40 UTC): Added information about institutional investors in last paragraph.
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Coinbase rolls out stock trading, prediction markets and more in bid to become the ‘Everything Exchange’
Coinbase is dramatically expanding the assets available to trade on its platform, including novel cryptocurrencies, perpetual futures, stocks and prediction markets, starting with Kalshi.
What to know:
- Coinbase is expanding offerings on its platform, introducing hundreds of top stocks based on market cap, trading volume, etc, with plans to add thousands of additional stocks and ETFs over the coming months.
- Coinbase users will also be able to trade on the outcomes of real-world events like elections, sports, collectibles, and economic indicators, starting with Kalshi and more to be integrated over time.
- A new AI-driven wealth management advisory service has been introduced, as well as Coinbase Business to help startups and small businesses incorporate crypto.
Top Stories
