By
Godfrey Benjamin
April 23rd, 2024
Coinbase stock has been on a downward trend for the past year, down 26.33 percent in the past year.
Coinbase Global Inc (NASDAQ: COIN) stock closed last week trading at $185.94, up 4.92 percent from the day’s opening price. However, 2.12 percent of the gains were lost during the extended trading period. And now Jim Chanos, founder of Kynikos Associates, thinks the stock will even fall further. Notably, Chanos told CNBC that he is shorting COIN stock.
According to him, Coinbase is currently overpriced, and may not make profits this year.
“We basically think Coinbase is over earning,” Chanos said in the interview. “If you do the numbers, their revenue base is roughly 3% to 4% of their custodian assets, their customer assets.”
As such, Chanos thinks Coinbase is facing stiff competition from the rest of the crypto exchanges. Moreover, crypto-based companies are springing up at a fast rate all over the world. Consequently, crypto services are getting easily accessible and also cheaper. Although a global firm, Coinbase is largely located in the United States.
Centralized crypto exchanges are, ostensibly, facing notable competition from DEXs. Moreover, the latter tend to offer cheaper and faster services, due to its nature of operations.
“There are plenty of companies that are in the new economy that have real growth, real cash flows, and real earnings, but there’s a lot that is just being sold on stories, and we would argue that Coinbase is one being sold on a story,” Chanos concluded.
Coinbase (COIN) Stock and the Market Outlook
According to market analytics provided by MarketWatch, Coinbase stock has been on a downward trend for the past year, down 26.33 percent in the past year. Additionally, COIN stock dropped approximately 23.59 percent in the past three months. However, the company’s stock market has risen approximately 16.16 percent in the past 5 days.
The company has a market cap of approximately $40.81 billion, and 171.17 million shares outstanding. In the past 52 weeks, COIN stock has ranged between $150.12 and $429.54.
Having been rated 25 times, the crypto firm received an average rating of Over. Additionally, the rating gave COIN stock an average recommendation of Overweight. With this, their average target price is $315.60.
As a market leader, Coinbase has made diversified investments to remain relevant. Some of the fields the company has diversified into, include NFTs and DeFi. Notably, the company has made notable acquisitions including crypto wallet, BRD, that was assimilated.
From a short-term perspective, Wall Street forecasts more losses. However, the crypto industry is expected to be in the lead during the next few years.