Coinbase Stock a Buy Opportunity Following Thursday's 'Overdone' Selloff, Oppenheimer Says
A recent selloff in Coinbase Global's shares following a cyberattack announcement and news about a regulatory probe has created a buying opportunity for the stock, Oppenheimer said in a note e-mailed Friday. The cryptocurrency exchange on Thursday disclosed a recent cyberattack that it said could cost the company $180 million to $400 million due to remediation actions and customer reimbursements. Separately, The New York Times reported about a US Securities and Exchange Commission investigation into a Coinbase user metric. Shares of the company slumped 7.2% Thursday, but were rallying 9.1% intraday Friday. "While these headlines have impacted near-term sentiment, they haven't changed our long-term view on the stock," Oppenheimer analysts Owen Lau and Guru Sidaarth wrote in the note. "We believe the sell-off is overdone."The brokerage reiterated its outperform rating on the stock, with a $293 price target. Coinbase, which is set to join the S&P 500 Monday, said Thursday that the affected data included names, addresses, phones and e-mails of clients, though the incident did not involve a compromise of passwords or private keys. The cyberattack was "an unfortunate event which impacts the reputation of (Coinbase), but it appears to be an isolated case," Lau and Sidaarth said. It affected less than 1% of Coinbase's monthly transacting users, while most of the financial impact will likely be incurred in the second quarter, they said. The SEC investigation is a hold-over probe about the verified users metric that the company stopped reporting two and a half years ago, Coinbase Chief Legal Officer Paul Grewal told MT Newswires. Grewal emphasized that this investigation shouldn't continue, but the market likely "read it differently, particularly after the cyberattack announcement," according to the Oppenheimer note.