Why Coinbase Global Stock Plummeted by 8% Today
Coinbase Global (NASDAQ: COIN) stock fell precipitously on Friday, and it wasn't hard to figure out why. Any company associated with the now-collapsed Silicon Valley Bank and its parent SVB Financial (NASDAQ: SIVB) took hard blows in the market today. Coinbase was a Silicon Valley Bank client back in the day, and the two companies' relationship went a little deeper at one point.
So to some degree it was understandable that investors would trade out of Coinbase. Panic was in the air Friday in the wake of Silicon Valley Bank's disintegration and subsequent receivership by the Federal Deposit Insurance Corporation. The fallout was swift and sharp, and numerous companies were damaged by it.
Coinbase wasn't only a SVB client; it was also one of that company's potential shareholdings. In 2014, when cryptocurrency projects and crypto-affiliated businesses were having a tough time securing financing from traditional sources, Coinbase gave a stock warrant to Silicon Valley Bank. Apparently, this was part of the two companies' agreement under which Coinbase could utilize the bank's services.
Source Fool.com
