Berenberg Capital revises Coinbase price target due to SEC lawsuit.
A report by investment bank analyst Mark Palmer at Berenberg Capital reveals that currently, Coinbase shares are considered “uninvestable” in the short term due to the ongoing lawsuit filed by the Securities and Exchange Commission (SEC).
Palmer pointed out in the report that the decline in second-quarter trading volumes on Coinbase was already expected before the lawsuit.
However, the legal action has added uncertainty, which has become an additional burden on the company’s stock.
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The analyst stressed that this uncertainty may intensify, potentially leading to continued weakness in the performance of Coinbase’s stock, which trades on the Nasdaq exchange under the ticker COIN.
The report noted that some investors are likely to reduce their exposure to Coinbase in response to the lawsuit and the increasing uncertainty surrounding its operations, making it a less attractive investment option in the near term.
Although Berenberg has maintained its hold rating on the stock, it has lowered its price target from $55 to $39.
On Thursday, Coinbase shares traded up just over 3% to $54.90, which remains well above Berenberg’s price target.
However, on the day of the lawsuit, the stock fell about 25% from Monday’s opening price to the open the following day.
The end of Coinbase in the US?
According to Berenberg, the SEC’s lawsuit against Coinbase could result in the complete closure of Coinbase’s core business in the United States if successful.
In that case, only Coinbase’s newly launched offshore crypto exchange, intended for non-US users, would remain.
The prospect of this outcome is heavily affecting the company’s share price, according to the Berenberg analyst.
