Coinbase’s Stock Rebounds After Hack and SEC Investigation News

Coinbase (NASDAQ: COIN) shares have rebounded strongly on Friday after tumbling yesterday following news of both a cyberattack affecting customer data and an SEC investigation into the company’s reported user numbers. The dramatic price recovery suggests investors may be reassessing the severity of these developments.

Did the market overreact to Coinbase’s Hack?

The crypto exchange’s stock plunged 7.2% on Thursday following revelations about a cyberattack and an SEC investigation, but analysts believe the selloff was excessive relative to the actual threats posed. According to Barclays, the market reaction to Coinbase’s recent troubles is “likely overblown,” despite the dual challenges facing the company.

The crypto exchange disclosed that overseas support agents were bribed into stealing customer data in what was characterized as a social engineering attack rather than a technical breach.

Importantly, the company specified that less than 1% of transacting users were affected, and no passwords, private keys, or customer wallets were compromised, though personal information such as names, addresses, masked Social Security numbers, and bank account data were accessed.

Mizuho Securities specifically emphasized that the cyberattack was “the result of social engineering and not a failure of underlying blockchain technology,” suggesting the incident doesn’t reflect fundamental vulnerabilities in Coinbase’s core systems.

The company has taken decisive steps to address the hack, including refusing to pay a $20 million ransom demand, reimbursing affected clients, and fully cooperating with law enforcement agencies. Regarding the separate SEC investigation, analysts noted that it specifically pertains to Coinbase’s verification of user numbers in its 2021 IPO filing, not current reporting metrics.

This distinction is important as it limits potential regulatory exposure to historical disclosures rather than ongoing business practices.

Barclays analysts expressed surprise at the market’s sharp negative reaction, suggesting that some of the selling pressure might be attributed to profit-taking following Coinbase’s recent rally after its addition to the S&P 500 index. The consensus among several financial institutions is that yesterday’s selloff represented a market overreaction that has created a potential buying opportunity for investors who believe in the company’s long-term prospects, especially given the crypto exchange’s dominant position in regulated digital asset trading in the United States.

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Coinbase Stock Rebounds Strongly on Friday

Coinbase stock (COIN) was trading at $269.12 as of 12:07 PM EDT on May 16, 2025, representing an impressive rebound of 10.10% or $24.68 from the previous day’s close of $244.44.

The stock has demonstrated significant volatility, trading in a daily range of $248.83 to $269.50 after opening at $249.70. Trading volume has been elevated at 14,533,308 shares, well above the average daily volume of 10,114,096, indicating high investor interest following yesterday’s negative news. The dramatic recovery suggests many investors view the previous day’s selloff as excessive.

Year-to-date, Coinbase shares have gained 8.47%, outperforming the S&P 500’s more modest 0.83% increase over the same period. The one-year return is even more impressive at 35.23% compared to the benchmark’s 11.95%. Over a three-year timeframe, COIN has delivered an extraordinary 336.52% return, dramatically outpacing the S&P 500’s 47.96%.

However, the five-year picture is less favorable, with COIN down 29.31% while the broader market has more than doubled with a 107.08% gain. This mixed long-term performance reflects the cryptocurrency market’s extreme volatility over that period.

Coinbase maintains a market capitalization of approximately $68.6 billion, placing it among the larger financial services companies focused on digital assets. From a valuation perspective, the stock trades at a trailing P/E ratio of 45.95 and a forward P/E of 42.19, metrics that reflect investors’ expectations for continued strong growth.

The company’s financial profile shows a healthy profit margin of 22.03% and trailing twelve-month revenue of $6.67 billion with net income of $1.47 billion. With $8.05 billion in cash on its balance sheet and relatively manageable debt levels (43.89% debt-to-equity ratio), Coinbase appears well-positioned to weather regulatory challenges and continue investing in security infrastructure.

Looking ahead, analysts anticipate earnings per share of $1.44 in the upcoming quarter, with the next earnings report expected between July 30 and August 4, 2025. Wall Street remains generally positive on the stock, with a consensus price target of $260.22, approximately in line with the current trading price following today’s recovery.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.