Coinbase Global plummeted to $66.3 per share — which represents a -14.05% drop from yesterday's levels. Analysts are giving the Capital Markets stock on average rating of buy, with target prices ranging from 0.4 to 0.69 dollars per share.
The market, on the other hand, is a bit more pessimistic. Coinbase Global's short interest -- meaning the percentage of its share float that is being shorted on an expectation of a price decline -- is quite high at 21.08%. The float includes only shares that are available for public trading, and excludes preferred shares.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Coinbase Global, institutional investors own 54.03% of the shares, which indicates they have a very high stake in the company. What does this really tell us?
Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in COIN, it probably means they believe it is a solid investment choice.
But it could also mean they are buying up shares in an effort to acquire the company or to get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.
Overall, there is negative market sentiment towards Coinbase Global because of an analyst belief that shares are overpriced, no average rating visible in our data, no information on the number of shares sold short, and no information on the number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about COIN:
It has trailing 12 month earnings per share (EPS) of $9.78 per share
Coinbase Global has a trailing 12 month Price to Earnings (P/E) ratio of 6.78 while the S&P 500 average is 15.97
The company has a Price to Book (P/B) ratio of 1.623 in contrast to the S&P 500's average ratio of 2.95
Coinbase Global is a Finance company, and the sector average P/E and P/B ratios are 14.34 and 1.57 respectively