Shares of Coinbase Global (NASDAQ: COIN) continued to plunge by more than 10% on Thursday morning, extending their losses from Wednesday after the crypto exchange received a “Wells notice” from the Securities and Exchange Commission (SEC).
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To add to the company’s woes, top-rated Oppenheimer analyst Owen Lau downgraded the stock to a Hold from a Buy and raised concerns about blockchain development in the U.S. after the collapse of its three regional banks. The analyst commented, “While we remain highly supportive of blockchain/digital asset development in the U.S., under this unhealthy regulatory climate, we are increasingly worried about the fairness of enforcement actions, and the ability for the ecosystem to grow with seemingly limited and shrinking support from the banking system in the U.S.”
Even Jeffries analyst Trevor Williams termed the SEC notice as “ominous” and reiterated a Hold rating on the stock with a price target of $60. The analyst’s price target implies an 8.7% downside potential at current levels. By the analyst’s estimate, the SEC notice could put COIN’s approximately 35% of net revenue at risk.
Williams commented, “We believe the notice is a likely precursor to an enforcement action, which could put revenue from alt. coin trading and staking in jeopardy if required to register with the SEC as securities.”
Overall, analysts remain sidelined about COIN stock with a Hold consensus rating based on eight Buys, eight Holds, and six Sells.