What happened
Shares of Coinbase Global (COIN 3.08%), a cryptocurrency exchange company, were rising this morning just a day after an analyst cut his price target for the stock. Today's jump likely comes as investors process comments made by the analyst, namely that the bear case for Coinbase's stock is "way overblown."
The crypto stock is up by 3.7% as of 10:50 a.m. ET.
So what
Yesterday, Oppenheimer analyst Owen Lau cut his price target for Coinbase's stock from $377 down to $314. That caused the company's share price to tumble initially, but today, investors appear to be latching on to the positive comments Lau made in his research note.
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First off, Lau kept an outperform rating on Coinbase's stock, indicating that he thinks the stock can outpace the broader market.
Most importantly, investors are focusing their attention on Lau's comments about the bear case against Coinbase being overblown. Here's what he said in the research note, as reported by MarketWatch:
"We believe the bear thesis is way overblown and that this creates an opportunity for long-term investors to get into one of the most disruptive companies in the market at what we see as a very attractive valuation."
That's exactly the kind of phrasing that gets some investors excited about a potentially disruptive stock, and it's what caused Coinbase's share price to spike this morning.
Now what
Lau believes that the crypto market is still in its early innings and that Coinbase's early lead in the market should help give it an advantage over the other exchanges that will inevitably pop up.
Long-term investors will likely have to endure some more volatility in Coinbase's stock, but with the company already having the largest cryptocurrency exchange in the U.S., it certainly seems that Lau's optimism isn't wholly misplaced.
