Mizuho cut its rating on crypto exchange Coinbase's shares on Friday to underperform from neutral and lowered its price target to $30 from $42, saying it expects depressed crypto trading volume in 2023 and 2024 to result in lower revenue for the exchange.
The stock fell 2.8% to $41.60 in premarket trading.
In a research report, Mizuho also said that interest income from Circle’s USD coin (USDC) has become increasingly important for Coinbase, accounting for 10%-15% of third-quarter revenue, amid deteriorating sentiment and trading volumes.
Any potential changes to Coinbase’s USDC income from Circle could have an “amplified adverse effect on its profitability,” the report said.
Coinbase, which is a co-founder of USDC, on Friday waived off conversion fees for users who wish to switch to USDC from Tether's USDT.
Irrespective of interest income risks, the bank’s analysis shows that 2023 revenue estimates are likely overly optimistic.
Coinbase CEO Brian Armstrong said on Wednesday that the company’s revenue will be half or less what it was last year as the exchange struggles amid sharp drops in cryptocurrency prices and continuing ripple effects from multiple bankruptcies this year, including the recent collapse of rival exchange FTX.
The company's shares have fallen over 80% this year, and the stock has been one of the worst performers on the Nasdaq index.
Read more: Crypto Exchange Coinbase Asks Users to Switch USDT for USDC
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Volkswagen AG (OTC: VWAGY) said it is deferring its location selection for the eastern Europe gigafactory for electric car batteries beyond 2022. The auto major took the decision after considering the volatile economic environment. The Czech Republic, Reuters reported, was considered for the plant along with Hungary, Poland, and Slovakia. Also Read: Porsche To Join Germany's Blue-Chip Index – What's On The Cards? "Volkswagen AG and its battery company PowerCo are continuously evaluating suitable
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