Coinbase Shares Surge 16% Following S&P 500 Index Inclusion Announcement
Coinbase (COIN) shares increased by 16% following the announcement of its inclusion in the S&P 500 index, effective after market close on Friday. This addition will replace Discover Financial Services (DFS), which is being acquired by Capital One (COF).
Key points include:
- Bernstein estimates $16 billion in buying pressure for Coinbase.
- Estimated breakdown: $9 billion from passive funds and $7 billion from active allocations.
- Coinbase is the first crypto company in the S&P 500.
- KBW anticipates 36 million Coinbase shares will be purchased for index inclusion, equating to four days of average volume.
- As of April 30, 9.9 million shares were held short, needing 1.4 days to cover.
- Financial firms added to the S&P 500 have historically outperformed by 5.2% the day after announcement.
Analyst Gautam Chhugani maintains an outperform rating with a price target of $310, suggesting a potential upside of about 30% from the current level of $240.