What Happened?
Shares of blockchain infrastructure company Coinbase (NASDAQ: COIN) fell 5% in the afternoon session after the company announced it got emails from hackers who claimed they broke into user accounts, accessed customer data, found internal documents, and took notes tied to help desk tools and account management systems.
Coinbase maintained it would not pay the $20M ransom demanded by the attackers and instead offered a $20M reward for information leading to their arrest and conviction. It also clarified that the breach affected less than 1% of Monthly Transacting Users (reported at 9.7M as of 1Q25).
In a regulatory filing, Coinbase estimated the total cost of the incident, including efforts to address the breach and reimburse affected customers, could range from $180 million to $400 million.
The stock's reaction suggested the market was worried about the material short-term financial headwind the incident could create. However, the limited scope (affecting less than 1% of Monthly Transacting Users) of the incident and the containment measures could dampen some of these concerns.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Coinbase? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Coinbase’s shares are extremely volatile and have had 66 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 22.9% on the news that the S&P Dow Jones Indices announced that the company would join the S&P 500 Index before the start of trading on Monday, May 19, 2025. The S&P 500 is a widely followed index that tracks the performance of the 500 largest companies in the United States.
Being included in the Index means that Coinbase will likely be held by many mutual funds and ETFs, which could potentially drive up demand for the stock. We note that while buying of the stock could increase, this development does not change the fundamentals of the company. Revenue growth, expense efficiency, and capital intensity of the business, for instance, are not impacted by index inclusion or exclusion, so this is more of a technical tailwind for the stock.
Coinbase is down 3.7% since the beginning of the year, and at $247.70 per share, it is trading 27.9% below its 52-week high of $343.62 from December 2024. Investors who bought $1,000 worth of Coinbase’s shares at the IPO in April 2021 would now be looking at an investment worth $754.47.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
