Circle Stock Gains Pre-Market After JPMorgan Turns Bullish, Cathie Wood’s Ark Invest Buys The Dip

• JPMorgan upgraded Circle’s stock to ‘Overweight’ from ‘Underweight’ with a $100 price target.
• The firm called Circle’s third-quarter results “solid,” citing better fundamentals.
• Ark Invest bought more than 353,000 Circle shares across three ETFs after Wednesday’s selloff.

Circle (CRCL) shares rebounded in pre-market trade on Thursday after the company received an upgrade from JPMorgan, and Cathie Wood’s Ark Invest bought the dip. 

The move followed a sharp 12% decline in the previous session, when the stock fell despite quarterly results that exceeded analyst estimates. CRCL’s stock was up as much as 1.3% in pre-market trade and was among the top trending tickers on Stocktwits. Retail sentiment around the USD Coin (USDC) issuer pivoted to ‘extremely bullish’ from ‘neutral’ over the past day, as chatter rose to ‘extremely high’ from ‘high’ levels.

JPMorgan raised its rating on Circle to ‘Overweight’ from ‘Underweight’ and increased its price target to $100 from $94. The firm said its upgrade was driven by “better fundamentals,” describing the company’s third-quarter results as “solid.”

Earnings Beat But Also Rate Concerns 

The issuer of USD Coin, the second-largest dollar-backed stablecoin after Tether (USDT), reported total revenue and reserve income of $740 million, above analyst expectations of $699 million, according to Koyfin data. Earnings per share came in at $0.64, beating the consensus forecast of $0.20.

Despite the stronger results, the stock slid on Wednesday on concerns that a possible U.S. interest-rate cut next month could weigh on returns from the short-term assets backing USDC reserves. Lower yields could reduce income generated from those holdings, a key driver of Circle’s earnings.

Deutsche Bank lowered its price target to $90 from $147 and kept a ‘Hold’ rating on the shares. While it viewed Circle’s Q3 print as being “very solid overall”, Deutsche Bank lowered its estimates to reflect more conservative USDC growth.

Ark Invest Adds To Position

Ark Invest purchased a total of 353,328 Circle shares across three of its exchange-traded funds – Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF). 

Ark’s buying came as Circle hit its lowest level since June 5 on Wednesday at $86.30, marking its steepest single-day drop in over four months. Ark often adds to positions during periods of volatility, particularly in technology and financial innovation stocks

ARKK’s price edged 0.1% lower in pre-market trade on Thursday, while ARKW rose 0.3% and ARKF was up nearly 1%. Retail sentiment on Stocktwits around all three of Cathie Wood’s ETFs was in ‘neutral’ territory.

Read also: Apple Strikes WeChat Deal With Tencent, Will Earn 15% From Purchases In Mini Games, Apps: Report

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on