3 Stocks Moving as Bitcoin Futures Go Live

Cowen thinks Square's upside potential is already priced in

Dec 11, 2017 at 9:47 AM
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Bitcoin futures began trading on the Cboe Global Markets Inc (NASDAQ:CBOE) last night under the symbol XBT. The contracts attracted such heavy volume that trading had to temporarily be halted, while CBOE's website underwent delays and outages. Shares of CBOE are trading higher this morning, as are Square Inc (NYSE:SQ) and Overstock.com Inc (NASDAQ:OSTK) -- two stocks with exposure to the cryptocurrency.

Cboe Global Markets Stock Trades Near Record High

Cboe Global Markets stock was last seen up 0.6% to trade at $126.07. It's been a steady climb up the charts over the past 12 months, with CBOE sporting a year-over-year gain of more than 69% -- and trading not far from its Dec. 4 record high of $127.78.

There's still plenty of skepticism levied toward the stock, though, despite it's impressive uptrend. While put options have been gaining in popularity in recent weeks, six of nine analysts maintain a lackluster "hold" rating. This leaves the door open for a round of upgrades, which could help keep the wind at CBOE's back.

Square Stock Overdue for Upgrades

The bitcoin buzz has lifted Square stock up 0.6% at $38.32. However, SQ's upside may be contained after Cowen initiated coverage on the payment processor with a tepid "market perform" rating and a $36 price target. The brokerage firm said any growth potential is already priced into the shares, and traders should wait for a more attractive entry point.

Since hitting a record high of $49.56 on Nov. 24, Square shares have pulled back to test support atop their 40-day moving average -- a trendline that's helped usher them to a 180% year-to-date lead. Analysts are still heavily skeptical of the stock, though, with 12 of 29 maintaining a "hold" or "strong sell" rating at last week's close, with the average 12-month price target of $39.13 roughly in line with SQ's current price. Upgrades to the outperformer could draw more buyers to the table.

Overstock Shares Surge on Morgan Stanley Stake

Overstock.com shares have jumped 14% to trade at $51.40. In addition to a bitcoin bump, the shares are also surging on late Friday's news that Morgan Stanley had taken an 11.4% passive stake in the company. The financial firm now holds the second-biggest stake in the e-tailer, right behind founder and CEO Patrick Byrne.

Today's positive price action echoes OSTK's longer-term trend, with the shares almost tripling in value year-to-date. More recently, the stock pulled back after nabbing a record high of $65.70 on Nov. 27, but found its footing atop the rising 40-day moving average.

While shorts could be on the verge of covering amid this surge, analysts may start to dole out upbeat initiations on OSTK. Just one brokerage firm currently covers Overstock.com, though they maintain a "strong buy" rating.

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