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Atlantic Equities downgrades Coinbase on crypto price and volume collapse, risk of further turmoil


Now is not the time to buy Coinbase as cryptocurrency prices remain volatile and risks of further collapse in the space continue to rise, Atlantic Equities says. “We have incremental concerns over the company’s ability to attract talent longer-term, as well as competitive concerns regarding the spread of misinformation over the company’s financial strength and consumer asset protections,” wrote analyst Simon Clinch as he downgraded shares to a neutral rating. “Additionally, our hopes for some stabilization in crypto prices and volumes have been dashed, with both tracking much weaker than expected.” Shares of cryptocurrency prices have plummeted in recent weeks to levels not seen since 2020 as investors continue to move away from the risk assets. Meanwhile, the collapse of stablecoin TerraUSD has only further hit sentiment. Amid this troublesome backdrop, Coinbase’s stock has cratered 78% this year and 85% from its 52-week high and Atlantic Equities sees further downside ahead for the company as a crypto winter looms. The firm slashed its price target on the stock from $95 a share to $54, which implies a 2.5% downside from Tuesday’s close. “We consider the risks to Coinbase of a crypto downturn similar to the aftermath of the dotcom bubble,” he wrote. “In such an event we believe our net revenue estimates could fall more than 70% in FY23 and FY24 with Coinbase remaining at an EBITDA loss throughout.” — CNBC’s Michael Bloom contributed reporting

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