Goldman Sachs says Coinbase may need to sack more workers; downgrades its stock rating to sell
Goldman Sachs, a major investment bank Downgrade Coinbase shares sold from neutral and lowered target price from $ 70 to $ 45 on CNBC, the latest note report June 27th.
The downgrade was triggered by the bear market, and the value of crypto assets plummeted to new lows. After reporting, Coinbase shares fell 5.7% to $ 59.40 in pre-market trading.
Coinbase’s revenue depends on the transaction fees you charge retail users.
However, rising inflation and a slump in the crypto market have significantly reduced the group’s trading activity, and Goldman Sachs predicts that foreign exchange income could be reduced by as much as 61%.
This will be a big blow to Coinbase as it reported a big loss in the second quarter of 2022.
Coinbase may need to fire more workers
The Brian Armstrong-led exchange is trying to cut costs and recently fired 18% of its employees due to lower profits and current market conditions.
On the other hand, efforts to diversify profits have not been completely successful.Recently released Non-Fungible Token Marketplace Since its launch, there has been little sales.
According to Goldman Sachs, Coinbase needs to cut spending to stop the resulting cash burn. The company added that it must decide whether to dilute shareholders or reduce employee compensation.
Other crypto stocks are also at risk
Coinbase stocks are not the only crypto-related stocks currently facing headwinds.according to BloombergMost listed crypto companies have seen their stock prices fall sharply.
Almost every listed company, including Microstrategy, Silvergate, Marathon Digital, Coinbase, and Riot Blockchain, has lost more than half of its value this year.
But Wall Street analysts Stay optimistic About the future of these companies. Approximately 20 analysts recommend buying Coinbase stock as a buy, despite recent poor performance.
According to BTIG analysts, Coinbase’s price target of $ 290 is Mark Palmer.
We haven’t denied the impact of the current crypto market slump at all, but believe that the idea that Coinbase can’t survive this latest challenge is going wrong in the light of the facts in the field. I am.
