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In a note to investors late Thursday, Citi analyst Peter Christiansen said that they are tactically reassessing the action plan for Coinbase (NASDAQ:COIN) while their longer-term thesis is well intact.
Citi hosted an investor group meeting with Coinbase’s CFO, Alesia Haas, with the investor Q&A primarily focused on spending plans and capital allocation given the continued downturn in the broader crypto market.
“We appreciated the company’s acknowledgment of the current environment and some color on how it assesses the state of its expansion plans – Coinbase is pausing spend for two weeks to reassess 2022 investment priorities,” said Christiansen.
On Thursday, it was revealed that Coinbase is extending its hiring pause for the foreseeable future.
The analyst stated that they believe “sentiment on the stock remains split, with some believing the pending ETH2 merge and current cash multiples represent a nearer-term opportunity, while more bearish investors expect continued ‘shoes to drop’ for the broader crypto market.
“Tactical sentiment aside, we think Coinbase’s capital and competitive positions remain enviable, leaving the stock well-positioned to be a strong rebounder should crypto volatility abate,” the analyst wrote.
Elsewhere Friday, BofA Securities analyst Jason Kupferberg said recent changes to Coinbase’s retail user agreement “should help address unfounded concerns about the safety of consumers’ assets held on the COIN platform.”
Kupferberg maintained a Buy rating on the stock and added that they “continue to see scarcity value in COIN as a long-term play on the digital asset economy, and believe management will execute well through periods of crypto volatility.”
“While COIN is currently experiencing its first period of sustained crypto weakness since becoming a public company in April 2021, the company has had significant experience managing the business (when it was much smaller) through prior ‘crypto winters’ (ie, 2014, 2018).”
Coinbase shares are down more than 7% Friday.
