tl;dr
Coinbase announced plans to raise $2 billion through convertible senior notes in a private offering for general corporate purposes, including potential acquisitions. The notes will be sold to qualified institutional buyers, with maturities in 2029 and 2032, convertible into cash, Class A common stoc...
Popular centralized exchange Coinbase announced on Tuesday its intention to raise $2 billion via convertible senior notes in a private offering. The funds will be used for “general corporate purposes,” which may include acquisitions of other companies, products, or technologies.
The company’s publicly traded stock closed on Monday at $314.69, down 25% from its all-time high. COIN has since slumped almost 2% in pre-market trading to $308.54. Coinbase’s sale will be open to “qualified institutional buyers” to purchase $1 billion worth of convertible senior notes that mature in 2029, as well as another $1 billion of notes maturing in 2032.
These notes can be converted into cash, shares of Coinbase’s Class A Common stock, or a combination of both. After paying the necessary expenses associated with the sale, Coinbase plans to use the proceeds for general corporate purposes, which may include working capital, capital expenditures, and investments in and acquisitions of other companies, products, or technologies.
Coinbase similarly announced a plan to raise $1 billion via convertible notes in March of last year, also indicating possible use for acquisitions. Since then, the company declared it would acquire crypto exchange Deribit for approximately $2.9 billion, consisting of $700 million in cash and 11 million shares of Coinbase Class A common stock.
The company went public in 2021, with shares reaching a record high of $419.78 last month alongside a Bitcoin surge. However, just a week later, Coinbase was fined $4.5 million by a UK regulator for allowing "high-risk customers" to purchase crypto.
On Thursday, Coinbase revealed its revenue had dropped 25% from the previous financial quarter. The exchange faced financial fallout following a major data breach in May but experienced some gains from its investment in stablecoin issuer Circle, which surged following its June listing. The day after the disappointing earnings call, COIN dropped 17%.