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ArkInvest sells over 1.4 million Coinbase shares

 


Star investor Cathie Wood has probably lost faith in Coinbase! More than 1.41 million shares were sold by Ark Investment Management funds 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. After the share had already fallen 21 percent because of the news about an investigation by the SEC, star investor Cathie Wood is now selling it.


Coinbase stock no longer attractive

Three funds owned by investment firm Ark Investment Management are reported to have sold more than 1.4 million shares of Coinbase Global (COIN) on Tuesday. At the current share price of just under $53, that equates to around $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 valued at around 55 US dollars. Coinbase's market capitalization is around $11.75 billion. This number may seem very high at first glance, but it is actually just a relic of earlier times. In November 2021, the company was worth around five times the crypto all-time high.


What made Ark Invest sell?

Cathie Wood's companies really could have picked a better time to sell had the stock been consistently higher over the past year. Ark Invest made headlines in spring 2021 when the company decided to sell around $178 million worth of Tesla stock 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. Overall, the company came to an average price of 254.60 US dollars per share.


Why the sale all of a sudden?


On the one hand, the US Securities and Exchange Commission SEC has been breathing down Coinbase's neck for a few days. The exchange is accused of having sold unregistered securities, i.e. cryptocurrencies, to US citizens. However, these allegations go much further in the crypto market. Coinbase would need to register with the SEC as an exchange if cryptocurrencies were to be classified as securities.


On the other hand, a few days ago, the SEC filed fraud charges against a former employee of the company. Product manager Ishan Wahi is suspected of stealing profits worth $1.1 million with two accomplices. Wahi allegedly shared information about token listings on the platform with his accomplices before it became public.


The community is now also criticizing the American stock exchange regulator:

The SEC nodded to Coinbase's IPO at the time, even though tokens like Ripple were already in their range. In addition, 4 years ago, the supervisors complimented Coinbase on the drafting of the securities framework agreement. Why such drastic measures are suddenly being taken is not entirely clear to this user.


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