Cathie Wood's Ark Invest bought $3.4 million worth of Coinbase shares on Monday, Nov. 2 — the same day Morgan Stanley downgraded the crypto exchange to underweight and slashed its price target to $120 from $258.

The purchase of 24,790 Coinbase shares was made through Ark's ARKK, ARKW and ARKF exchange-traded funds. Coinbase stock closed down 3.98% at $137.83 that day. Because Ark discloses its ETF trades daily, the same-day juxtaposition of its buying and Morgan Stanley's downgrade played out entirely in public view.

Morgan Stanley sees fourth-quarter revenue below consensus

Analyst Michael Cyprys cut the stock to underweight from equal weight. The new $120 target implies about 16% downside from Friday's close. His initiation thesis had called for earnings to reset in 2026 before bouncing back sharply in 2027. Coinbase shares are down roughly 25% over the past month.

"October's weaker trading pace and crypto market uncertainty challenge our recovery thesis," Cyprys wrote.

His note pegged fourth-quarter transaction revenue through Oct. 25 at about $165 million. At that pace, the quarter would come in around $607 million, approximately 11% below the $685 million consensus. Cyprys also pointed to last week's roughly $6 billion Binance hack as a negative for crypto trading.

Morgan Stanley slashed its Coinbase revenue estimate for 2027 by 28% and its adjusted EBITDA estimate by 47%. The bank cut its 2028 revenue forecast by 18% and its adjusted EBITDA estimate by 25%, and trimmed its EBITDA multiple for Coinbase to 12 times from 20 times.

The downgrade runs counter to the broader Street. Of the 41 analysts covering Coinbase, 26 rate the stock buy or strong buy, while 13 rate it hold, leaving Cyprys's underweight among the most cautious ratings on the stock.

Ark adds Circle and Robinhood while trimming Bullish

Ark also purchased 35,657 shares of Circle worth $2.6 million and 7,703 shares of Robinhood worth $645,820. Circle shares fell 0.63% to $72.08, and Robinhood declined 1.35% to $83.84.

Across Friday and Monday, the three funds bought 64,208 Coinbase shares and 110,551 Circle shares, while selling 342,545 Bullish shares over the two sessions. Ark offloaded 104,172 Bullish shares on Monday alone for $2.3 million as the stock slid 5.69% to $22.54.

Ark's Nov. 2 filing for its ARKK holdings (holdings file) shows a 3.78% weighting in Coinbase, comprising 1,622,945 shares. Circle carries a higher weighting, with 3,813,256 shares worth $276.6 million, or 4.48% of the fund. Robinhood accounts for 2.82% with 2,047,447 shares, while Bullish stands at 1.47% after the sale. Combined, those three long positions put just over 11% of ARKK in crypto-linked stocks, which is why the fund's daily disclosures double as a running gauge of its digital-asset exposure.

The trading came days after Coinbase's third-quarter results. Net income climbed 66% year-over-year to $719 million, while revenue fell 35% to $1.22 billion, according to Cryptopolitan. Coinbase's prediction markets surpassed $200 million in annualized revenue, roughly twice the previous quarter's total. Robinhood, for its part, said crypto revenue rose 20% from the prior quarter to $120 million.

Ark took its ARK Venture Fund onchain through Securitize in September.

Circle is scheduled to report third-quarter earnings on Wednesday, Nov. 4, with analysts anticipating revenue of $788.17 million and earnings per share of $0.37. Bullish will report on Nov. 18. In the meantime, Ark's daily trade disclosures will show whether the recent buying — and the Bullish trimming — continued.