It is time to take a pause on shares of Coinbase as the corporate faces potential scrutiny within the wake of FTX’s blowup and retail buying and selling volumes decline, Cowen mentioned. Analyst Stephen Glagola downgraded shares of the crypto trade operator to market carry out from outperform, citing a troublesome macro backdrop and FTX-fueled crypto considerations unlikely to subside close to time period. “There’s low visibility per stabilization in retail buying and selling volumes in 2023 following additional December deterioration,” he wrote. “Potential SEC enforcement motion is elevated post-FTX with regulatory certainty unlikely till 2024.” Coinbase shares plummeted 86% in 2022, slumping 34% alone since FTX filed for chapter in November . That is partially because of the inventory’s heavy correlation to crypto asset costs, which have declined considerably. A constant drop-off in buying and selling volumes that started over a yr in the past is one other issue weighing on shares, with Glagola anticipating one other spherical of layoffs this yr to assist reduce prices. Together with the downgrade, Glagola lowered income and adjusted EBITDA estimates for 2023 under consensus expectations and slashed his worth goal on shares to $36 from $75 a share. The worth reduce suggests greater than 4% draw back from Wednesday’s shut. Shares dipped barely earlier than the bell. — CNBC’s Michael Bloom contributed reporting
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