The stock market showed its mettle last week, with solid gains for major indexes. However, the momentum didn't last very far into Monday, and midday comments from Fed chair Jerome Powell left the Nasdaq Composite (NASDAQINDEX: ^IXIC) down more than 1.5% as of 1:30 p.m. ET.
Last week's rally gave a big boost to some beaten-down stocks. Among them, Coinbase Global (COIN -0.34%) rose more than 20% last week from the lows it set just a few days prior, and Immunogen (IMGN) gained 10%. Yet today brought sharp declines for both stocks that in one case took back all of those gains and then some. Below, let's take a closer look at what's moving Coinbase and Immunogen Monday.
Image source: Getty Images.
Coinbase rouses a naysayer
Shares of Coinbase Global were down more than 6% in the early afternoon on Monday. The cryptocurrency exchange has attracted the attention of a well-known short-selling investor, and shareholders got their first opportunity to react after negative comments came out late Friday.
Jim Chanos, founder of Kynikos Associates, has built up a reputation for his short calls, and he turned his gaze onto Coinbase late Friday in an interview on CNBC. Chanos said that he had entered a short position of unspecified size in the cryptocurrency-exchange stock.
The rationale Chanos gave was similar to what those who follow Coinbase have seen from a number of sources. Chanos believes that as more crypto exchanges begin to compete against one another more fiercely, Coinbase is unlikely to sustain the relatively high commissions that it has been able to garner from traders. The Kynikos founder calculated Coinbase's take rate at roughly 3% to 4% of customer assets, and he's skeptical that the company will turn a profit for 2022.
The move lower in Coinbase was particularly unusual because cryptocurrency prices were largely steady to higher on Monday. Bitcoin did move slightly lower, but Ether was up nearly 3%, and some smaller digital tokens saw even bigger gains. Coinbase shares often react positively when interest in crypto leads to higher prices for Bitcoin and its peers, but a bearish stance from Chanos seemed to carry the day among investors.
Immunogen disappoints Wall Street
Meanwhile, Immunogen shares were down more than 20% on Monday afternoon. The antibody-drug conjugate specialist announced results from a clinical trial of one of its most promising candidate treatments, but despite some favorable findings, stock analysts raised questions about the results.
On their face, Immunogen's results from its Soraya trial of its mirvetuximab therapy for ovarian cancer patients seemed positive. The trial met its primary endpoint with respect to demonstrating significant objective response rates, including a handful of complete responses to the treatment. The duration of response was also relatively strong at nearly seven months, and progression-free survival rates were 4.3 months.
Yet Immunogen still got downgraded by analysts at RBC Capital, who cut their rating from outperform to sector perform and slashed their price target on the stock from $9 per share to $6. RBC seemed concerned that progression-free survival of just 4.3 months could lead some to draw the conclusion that the treatment doesn't do enough to help patients.
Immunogen has been counting on positive results from the Soraya study of mirvetuximab. It's not the only candidate the company has, but Immunogen hopes that its Mirasol confirmatory trial for the drug will put it in position to file for approval with the Food and Drug Administration. Anything short of that goal would be a significant disappointment for Immunogen.
