According to Bloomberg News, Coinbase Global Inc. has dropped steeply in the current year, mainly mimicking the drop in the prices of Bitcoin and taking the market value down to $12.5 billion from a peak that was above $75 billion in the past year. However, Wall Street continues to remain bullish on the stock market.
The crypto exchange is nearly down by 77% in the current year. But the stock is recommended strongly despite the first-quarter earnings report, which was weaker than expected. A buy rating of 22 for the stock is given as per data gathered by Bloomberg. While selling the stock was suggested, at least five gave a hold rating.
Even an analyst of Mizuho Securities, with one of the lowermost price targets on stocks of Coinbase is hopeful about the ability of the company to stabilize the shares price in the current month.
Dan Dolev, associated with Mizuho, revealed in a note on Thursday that they still believe the price at which it is attained is way too high, and this is not likely to be any cost less. On Thursday, he lowered his price target on the stock from $135 to $60. Coinbase has an average price target of $170.09, as per Bloomberg data.
Crypto Crunch
The larger investors have piled in as well. As per Wednesday’s trading update, Cathie Wood’s Ark Investment Management, the third-largest investor in Coinbase, has also increased the stock holding. Wood, who is popularly known for selecting companies that promise long-term growth, stated at a panel with Brian Armstrong, the chief executive officer of Coinbase, last week, where they spoke about the prospects of crypto.
Coinbase surged by 12% on Thursday to $60.30, paring a decline of 26% on Wednesday.
Bloomberg News reports that the extent of the fall is majorly due to a lack of understanding amongst the retail investors about how well Coinbase is capitalized, as per Mark Palmer, a fintech analyst at BTIG. He had set $380 as the price target for the stock, which is one of the highest quoted among the analysts.
While the current environment in the market is quite challenging, stated Palmer, Coinbase would gradually see a different environment that would be competitive in case there is a shakeout among the smaller exchanges.
Although the results manifest a lackluster and steep drop in the market value, the company is not likely to be a target for acquisition, stated Palmer. Palmer added that the management is expected to refuse a bid even if the price quoted is premium.
