The price of shares of the cryptocurrency exchange Coinbase fell by 5.6% – to $ 243.9 per share, as evidenced by data from trading on the NASDAQ exchange. During the session, the price of securities fell by 7.8% – to $ 238.25 per share. The previous business day of the paper ended at $ 258.37.
For the first time, Coinbase shares has dropped below its listing price. The reference price for the shares set by the NASDAQ was $ 250 per share in mid-April.
Shares of the marketplace fell after the decline in the value of Bitcoin, which came under pressure after the coin was criticized by the head of Tesla and SpaceX Elon Musk. On May 17, the price of Bitcoin fell to $ 42 thousand for the first time since February 2021.
The experts also drew attention to the growing competition that Coinbase is now facing as cryptocurrency adoption grows globally.
While Coinbase could still rely on its first mover advantage and brand awareness, margins could continue to decline due to competition from both CeFi brokers like BlockFi and DeFi alternatives like Uniswap.
Other large companies, whose activities related to the cryptocurrency sector, today also turned out to be subject to negative dynamics. Riot Blockchain, Inc. (RIOT) fell 12.9%, Marathon Patent (MARA) fell 10.7%, Canaan (CAN) fell 4.8%, and Galaxy Digital (BRPHF) fell 6.3%.
Analysts believe that quotes will rise by more than 70% within a year
Coinbase was founded in 2012. On April 14, the company entered the NASDAQ through a direct listing and became the first cryptocurrency exchange in the world traded on the stock market. Debut trading in shares began at $ 381 per share. In the first minutes of trading, they soared 71% compared to the reference price, to $ 429.54. However, since then the securities have not managed to return to this mark.
According to experts, the high price of the shares was directly related to the large information noise around the cryptocurrency market, as well as the fact that Bitcoin was at its all-time highs.
However, analysts still believe that quotes will rise during the year. The consensus forecast is $ 418 per share in the next 12 months, which is more than 70% higher than the current price. Nine experts recommend buying securities, and four – keeping shares in a portfolio.
Coinbase raises $ 1.25 billion amid falling stock prices
Coinbase has announced a $ 1.25 billion private placement of convertible bonds maturing in 2026.
According to the company, qualified institutional investors will be able to buy the bonds. The first of them, the exchange will provide an opportunity to purchase securities for $ 187.5 million within 30 days.
Medium-term bonds represent Coinbase’s unsecured priority liabilities. The interest on them is planned to be paid every six months.
The maturity date is June 1, 2026. Unless the company buys back or converts the bonds earlier in accordance with the terms of their issue.
Coinbase writes: “The securities are available for conversion to traditional currency, Coinbase Class A common stock, or a combination at Coinbase’s discretion”.