Coinbase Stock Swings After SEC Drops Lawsuit
Coinbase stock is bouncing between positive and negative territory Friday on news the SEC is dismissing its lawsuit against the the crypto exchange.
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Coinbase Global (COIN) stock jumped nearly 4% out of the gate Friday after the cryptocurrency exchange said that the Securities and Exchange Commission (SEC) has agreed in principle to dismiss its enforcement case against the company. However, at last check, shares had erased these gains to trade lower.
"We've always maintained that we were right on the facts and the law, and today's announcement confirms that this case should never have been filed in the first place," said Coinbase Chief Legal Officer Paul Grewal in a blog post. "This is a victory not just for Coinbase, but for our customers, the United States, and individual freedom."
In June 2023, the SEC charged Coinbase with operating an unregistered securities exchange, broker and clearing agency. It claimed Coinbase "made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities."
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"Coinbase went public in April 2021. As part of that process, the SEC reviewed our business model and S1 disclosures and allowed us to go public," Grewal said. "Two years later, they sued us. That's despite absolutely nothing changing in our business model."
The dismissal of the lawsuit is still subject to Commissioner approval.
Is Coinbase stock a buy, sell or hold?
Coinbase Global has been one of the best stocks to buy since Donald Trump won the U.S. presidential election in November, nearly doubling in value on hopes of a more crypto-friendly administration. Unsurprisingly, Wall Street is bullish on the large-cap stock.
According to S&P Global Market Intelligence, the average analyst target price for the financial stock is $330.38, representing implied upside of nearly 30% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Needham is one of those with a Buy rating on COIN stock, along with a $330 price target.
"We view Coinbase as an attractive way to play the growing crypto asset universe, which includes overlap in the high-growth areas of stablecoins, decentralized finance (DeFi), non-fungible tokens (NFTs), exchanges in spot/derivatives, and blockchains (Base)," wrote Needham analyst John Todaro in a February 14 note.
Todaro expects Coinbase's institutional business to become a larger trading segment as the crypto markets mature.
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