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Coinbase Continues Slide as Investors Question Valuation

Coinbase has continued to drop. It trades at 174 times earnings, 44 times sales, 19 times cash flow and 36 times book value, according to Morningstar.
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Shares of Coinbase  (COIN) , the U.S.'s biggest cryptocurrency exchange, fell on Thursday, continuing a slide from last month’s initial public offering as investors question its valuation.

Coinbase recently traded at $257.29, down 5.8%. It has dropped 21% from its first day of trading April 14. It went public with a reference price of $250 in a direct listing.

The stock trades at 174 times earnings, 44 times sales, 19 times cash flow and 36 times book value, according to Morningstar. That’s not exactly a value stock.

The exchange’s fate is closely tied to bitcoin, the dominant cryptocurrency. Bitcoin has slid 10% in the past month, recently trading at $57,180, down 0.34%.

Many see the rise of cryptocurrencies, special purpose acquisition companies, or SPACs, and non-fungible tokens (NFTs) as major speculative bubbles, destined to pop.

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While digital currencies likely have a major role in the markets, there’s no certainty as to their ultimate structure or whether an exchange will be needed to trade them.

Here’s a history of Coinbase from TheStreet.com.

On Tuesday, Mizuho Securities analyst Dan Dolev boosted his price target for the stock to $315 from $285 but said he was skeptical about the company's medium-term prospects.

“We are most concerned with heavy reliance on retail trading commissions (80% of sales)," he said in a commentary

Coinbase said last month that it’s acquiring Skew, a data visualization and analytics platform for cryptocurrency markets. Terms weren't disclosed. The deal is expected to close in this quarter.