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Coinbase Global (NASDAQ:COIN) fell about 2% in after hours trading after well known short seller Jim Chanos said he’s short the cryptocurrency exchange.
“Coinbase is what we would call one of the bubble stocks,” Kynikos’s Chanos said in an interview with CNBC.
Coinbase went public in April through a direct listing and its shares jumped 31% on the first day of trading, though the shares are down 25% since the IPO and have dropped about 48% since hitting a high of $357 in early November.
“We basically think Coinbase is over earning,” Chanos said. “We think as competition increases amongst the exchanges you are going to see fee compression. As it is Coinbase will probably not be profitable this year with a $40 billion market cap.”
Chanos also said that he’s short Futu Holdings (FUTU). Futu fell 2.2% in after hours trading.
Coinbase (COIN) short interest is 4.2%.
“There are plenty of companies that are in the new economy that have real growth, real cash flows and real earnings, but there’s a lot that are just being sold on stories and we would argue that Coinbase is one being sold on a story,” Chanos said.
On Wednesday, Coinbase Pay was launched to streamline adding funds to wallet.