Star investor Cathie Wood has probably lost faith in Coinbase! More than 1.41 million shares were sold by funds of Ark Investment Management, which is controlled by Wood, on Tuesday.
The once so successful American crypto company does not seem to be able to get out of the negative spiral anymore. After the stock had already fallen 21 percent because of the news surrounding an investigation by the SEC, a sell-off now follows through Startup investor Cathie Wood.
Coinbase Stock No longer Attractive
Three funds of the investment firm Ark Investment Management are said to have sold more than 1.4 million shares of Coinbase Global (COIN) on Tuesday. At the current share price of just under US $ 53, this corresponds to around US$ 75 million. Despite all the pessimism, this represents only a fraction of all the shares held by Ark.
The share was able to stabilize somewhat in after-hours trading and is currently worth around $ 55. The market capitalization of Coinbase is about $ 11.75 billion. This number may seem very high at first glance, but in fact it is only a relic of earlier times. The company was worth around five times its crypto all-time high in November 2021.
A picture of: https://twitter.com/ArkkDaily/status/1552082148873699329
As can be seen in the picture, the AARK sold 1,133,485, the ARKW 174,611 and the ARKF (not in the picture) 110,218 shares.
What prompted Ark Invest to sell?
Cathie Wood’s companies could have chosen a better time to sell if the stock had been continuously valued higher last year. Ark Invest made headlines in the spring of 2021 when the company decided to sell Tesla shares worth about $178 million for Coinbase. According to Bloomberg, the company still held around 8.95 million shares in June.
Even in May, Ark took another chance and bought 546,579 shares worth $ 29.3 million. In total, the company achieved an average value of US $ 254.60 per share.
Why all of a sudden the sale?
On the one hand, the US Securities and Exchange Commission (SEC) has been sitting on the back of Coinbase for a few days. The exchange is accused of selling unregistered securities, i.e. cryptocurrencies, to US citizens. However, these allegations go much further in the crypto market. Coinbase would have to register with the SEC as an exchange if cryptocurrencies are classified as securities.
On the other hand, a few days ago, the SEC filed charges against a former employee of the company for fraud. Product manager Ishan Wahi is suspected of having stolen profits worth $ 1.1 million with two accomplices. Wahi is said to have passed on information about token listings on the platform to his accomplices before they reached the public.
Meanwhile, criticism of the American stock exchange supervisory authority is also being voiced from the community:
The SEC had nodded off Coinbase’s IPO at that time, although tokens such as Ripple were already in their assortment. In addition, there were already compliments from the supervisory authorities to Coinbase 4 years ago for the preparation of the securities framework agreement. Why such drastic measures are suddenly being taken is not entirely clear to this user.