• Berenberg Investment Bank has cut its price target on Coinbase shares to $39 from $55 and declared it “uninvestable” in the near term.
• This is due to the US Securities and Exchange Commission’s lawsuit filed against Coinbase, as well as a task force of 10 U.S. states alleging that Coinbase’s staking rewards program violates state securities laws.
• The SEC’s desired remedy would likely require the complete closure of Coinbase’s core business in the U.S., which will also weigh on share prices.
Berenberg Cuts Price Target on Coinbase Shares
Investment bank Berenberg has cut its price target on Coinbase (COIN) shares to $39 from $55 and declared it “uninvestable” in the near term. This is due to the US Securities and Exchange Commission’s (SEC) lawsuit filed against Coinbase, as well as a task force of 10 U.S. states alleging that Coinbase’s staking rewards program violates state securities laws.
SEC Lawsuit Creates Negative Overhang
The SEC lawsuit and task force have created a negative overhang on the company’s share price, with investors potentially reducing their exposure to its platform due to uncertainty about the outcome of those cases. Analyst Mark Palmer wrote that they view COIN shares as uninvestable in the near term due to this overhang, maintaining its hold rating on stock despite slashing its price target on it drastically down from $55 to $39.
Potential Impact Of Outcome Of Lawsuit
The SEC’s desired remedy would likely require the complete closure of Coinbase’s core business in the U.S., which will also weigh on share prices if this were to be put into action upon resolution of these lawsuits. As such, more uncertainty remains around what might happen should either or both of them prove successful for authorities bringing these allegations against Coinbase.
Uncertainty Remains Around Outcomes Of Cases
With no clear resolution in sight regarding either case, investors must remain cautious when considering whether or not they should invest in COIN shares at this time given all of this uncertainty surrounding them at present. It may be some time before we are able to get clarity about how these cases could affect COIN’s future operations going forward too, so caution is advised at present when considering any investment decisions related to COIN shares right now..
Conclusion
Ultimately, Berenberg has cut its price target significantly while declaring COIN “uninvestable” for now due to all of this uncertainty surrounding two separate legal cases brought against it by regulatory bodies – one from an individual agency and another involving a collective effort between multiple states’ agencies – leaving investors uncertain about what may occur once each case reaches a conclusion in court going forward