Crypto exchange Coinbase rallied briefly, then dove 2.1% while reeling from the dual blow of U.S. Supreme Court decision on Monday and a fund rebalancing that saw Cathie Wood’s ARK Invest unload $95 million worth of shares.
The company’s shares were recently trading for $345.79, down 2.1% in midday trading.
The Supreme Court declined to hear Coinbase’s appeal in Harper v. Faulkender, which would have challenged a “John Doe” summons from the IRS to review user transaction data—without identifying who or what it’s looking for.
Coinbase and privacy advocates were hoping the high court would revisit its “third-party doctrine” and grant crypto exchanges the same kind of carve-out extended to cell phone service companies for clients’ call data.
The company was also addressing the aftermath of noted Bitcoin enthusiast Cathie Wood’s firm ARK Invest selling a hefty $95 million worth of COIN on Monday as it rebalanced several of its ETFs.
The company unloaded 77,956 shares from its flagship ARK Innovation ETF, or ARKK; 29.802 worth of COIN from its ARK Next Generation Internet ETF, or ARKW; and 17,134 shares from its ARK Fintech Innovation ETF, or ARKF.
Managed funds periodically buy and sell assets to rebalance their portfolios, not necessarily because they’ve soured on a company. Still the sum represents significant selling pressure.
The Coinbase stock, which trades on the Nasdaq under the COIN ticker, just notched an otherwise strong Q2. COIN shares more than doubled from their April 1 open of $172.82 through their June 30 close of $350.49.
Just last week, COIN hit a new all-time high close of $375. Leading up to the new high water mark, Benchmark analysts called the company “transformative” and gave it a $402 price target. And Bernstein analysts said COIN is “misunderstood,” setting an even loftier price target of $510.
William Blair analyst A. Jeffrey said he expects the company will post a $1.33 per share gain when it reports earnings. The company’s next earnings call is scheduled for early August, according to a Zacks Investors Research estimate on Nasdaq.
Edited by James Rubin
