Atlantic Equities analyst Simon Clinch has warned investors to pull out of Coinbase Global Inc now that its stock has rallied more than 150% since the start of the year. On Wednesday, Clinch downgraded the crypto exchange to “neutral” with a price target of $80, predicting a 10% downside from its previous close.
Clinch cited valuation and ongoing regulatory scrutiny as reasons for turning dovish on Coinbase stock. He noted that the risk/reward “looks less attractive at this level given continued regulatory challenges ahead and the surprisingly weak volume backdrop.”
The SEC sued Coinbase Global Inc last month for violating the U.S. securities laws. In addition, the company added an instant messaging feature to its wallet on Wednesday. Clinch warned that the decline in USDC market cap could also affect the firm’s interest income, causing the outlook for the rest of 2023 to deteriorate. Coinbase Global Inc is estimated to lose 84 cents a share in its current financial quarter versus $4.95 per share a year ago.
On the same day as Clinch’s downgrade, famed investor Cathie Wood trimmed her stake in the crypto exchange. Her flagship Ark Innovation ETF sold 135,152 shares of Coinbase for roughly $12 million.
