Coinbase’s stock tumbled below the cryptocurrency exchange’s direct listing reference price of $250 for the first time early Monday New York time after an Elon Musk tweet caused a sell-off in bitcoin and other cryptos.
The stock closed at $258 per share on Friday after flirting with the reference price several times that day. It plunged early Monday to a record low of $238. The drop was triggered by the Tesla CEO’s tweet Sunday that implied he either had sold or might sell the electric vehicle maker’s more than $1 billion in bitcoin.
The Coinbase stock recovered some ground after Musk confirmed Tesla had not (yet) sold its bitcoin holdings. The stock was back up to $246 as of press time. This is the first time COIN has fallen below the price that Goldman Sachs and the Nasdaq decided it should trade at before the exchange’s direct listing. On that day, the stock opened well above the reference price at $381 and rose as high as $429.54 before closing at $328.
Since then, the price of COIN has trended downward, dropping 21.3% from its closing price of $328 on April 14 to $258 as of Friday.
COIN’s drop seemed to follow that of bitcoin, the leading cryptocurrency by market cap, where the price fell 20.5% during the same period. The dual drop seemed to confirm what some equity analysts had pondered at the time of Coinbase’s listing – that COIN might act as a proxy bitcoin exchange-traded fund (ETF). Given COIN’s drop in response to bitcoin’s plunge, that correlation seems more definite.
COIN is far from the only company stock brought low by Musk’s tweet. MicroStrategy (MSTR), another stock viewed as a proxy for bitcoin due to the billions in dollars worth held on the balance sheet, is down 6.7% to $486. Meanwhile, shares of bitcoin miner Riot Blockchain (RIOT) is down 11% to $23.