Coinbase Global Inc. eased in premarket trading as the stock seeks to establish a level after the volatility that followed Wednesday’s direct listing.
The stock traded at $321 as of 5:23 a.m. in New York, down less than 1% from Thursday’s closing price of $322.75. Bitcoin also declined.
Some in the market are struggling to place a value on the biggest U.S. cryptocurrency exchange, which has been unable to sustain its initial strength after rising as high as $429.54 on its first day of trading. Some bullish sentiment is starting to build though, with those analysts that have initiated coverage mostly taking a positive view. And Cathie Wood’s funds have snapped up about $352 million worth of shares over two days.
“Coinbase’s market valuation may seem excessive to some given the prospects of increased competition in digital wallets business, which should rapidly eat into Coinbase’s sweet profit margins,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in emailed comments. “On the other hand, the competition is not here yet, while large trading volumes continue boosting Coinbase’s revenues for the moment.”
DA Davidson analyst Gil Luria raised the firm’s price target to a Street-high of $650 and touted the company’s “regulatory-friendly” approach to the nascent market. Loop Capital Markets initiated coverage with a buy recommendation and a $394 price target.
Wood’s funds, including her flagship Ark Innovation ETF, bought 341,186 shares in total on Thursday, according to figures released by the funds in an email. That takes Ark Investment Management LLC.’s Coinbase purchases beyod one million shares.
Bitcoin fell around 3.8% to $60,990 in New York, having come close to hitting $65,000 per token earlier this week.
(Updates with Bitcoin price in final paragraph)
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.