LONDON – Coinbase’s shares fell 11.5% before the open on Friday, set to open at their lowest in a month, after the crypto exchange reported a drop in second-quarter adjusted profit due to a slowdown in trading.
Its stock was last trading at $334.48, on track to wipe out nearly $11 billion of market value if current levels hold.
“We see the shares as significantly overvalued. We believe that the market is projecting too much future growth for the firm,” Morningstar analyst Michael Miller wrote in a note.
The sharp investor reaction underscores the challenge Coinbase, as a major player in the crypto space, faces to sustain its recent strong revenue growth.
Its shares have gained 52% so far this year as of their last close, ranking among the top 15 gainers on the benchmark S&P 500 index, which Coinbase joined in May.
Analysts, however, said trading volumes could improve this quarter, based on the company’s revenue estimates for July.
The month saw a surge in crypto enthusiasm after the Genius Act was signed into law. The landmark legislation pushed bitcoin to a record high.
