Why Circle Internet Stock Crashed Today
Shares of Circle Internet Group (NYSE: CRCL) closed 10.2% lower on Thursday. The issuer of the popular USD Coin (CRYPTO: USDC) stablecoin received a skeptical review from analyst firm Compass Point.
Compass Point analyst Ed Engel lowered his Circle recommendation from "neutral" to "sell." The firm's target price dropped from $79 to $77 per share, citing signs of lower profit margins in recent USD Coin activity.
More specifically, USD Coin has seen dramatic usage growth on crypto-trading platforms carrying costly distribution deals with Circle. Crypto brokerages without these deals tend to generate more profit for Circle, so Engel expects disappointing gross margins and bottom-line profits under these circumstances.
Source Fool.com
