TLDR
Coinbase to raise $2B via convertible notes to fund acquisitions and investments.
The offering includes two tranches maturing in 2029 and 2032.
COIN stock has dropped 25% from its peak, reflecting declining revenue.
The funds will support corporate purposes, including capital expenditures.
Crypto exchange Coinbase has announced plans to raise $2 billion through the sale of convertible senior notes. This move comes as the company’s stock, COIN, has experienced a decline in pre-market trading. The funds raised will be used for general corporate purposes, including acquisitions, investments, and other capital expenditures.
Coinbase Convertible Notes Sale Details
Coinbase will offer $2 billion worth of convertible senior notes to qualified institutional buyers. The offering consists of two tranches: $1 billion in notes maturing in 2029, and $1 billion maturing in 2032. These notes will be unsecured obligations of Coinbase and will accrue interest, which will be payable semi-annually.
The company expects that the proceeds from this offering will be used for various corporate needs, including acquisitions and investments. Coinbase may also use the funds to finance capital expenditures and improve working capital. This sale follows a similar offering in March 2024, which raised $1 billion for acquisitions.
In addition to the $2 billion offering, Coinbase will allow initial purchasers of the notes to buy an additional $150 million in notes for each tranche. This is aimed at increasing the potential funds raised. The interest rate and conversion terms for the notes will be finalized once pricing is determined.
Financial Performance and Declining Stock Value
Coinbase’s stock, which closed at $314.69 on Monday, has dropped significantly since its all-time high. The stock is currently down by approximately 25% from its peak. On Tuesday, COIN slipped by 2% in pre-market trading, reflecting the ongoing sluggishness in the company’s market performance.
Last week, Coinbase revealed that its revenue had fallen by 25% from the previous quarter. This decline was attributed to several factors, including a major data breach in May.
However, the company also noted some positive developments, particularly in its investment in Circle, the stablecoin issuer, which saw a surge following its listing in June.
Use of Proceeds and Future Strategy
Coinbase’s plans for the funds are centered on maintaining its growth and expanding its business. The company indicated that the capital would be used for working capital, capital expenditures, and acquisitions of new companies or technologies. The firm also noted that it could use the funds to support stock buybacks, further enhancing its financial flexibility.
Notably, Coinbase has recently expanded its Bitcoin holdings. As of the second quarter of 2025, Coinbase purchased an additional 2,509 Bitcoin, bringing its total holdings to 11,776 Bitcoin, valued at approximately $1.26 billion. These efforts reflect Coinbase’s broader strategy to maintain a strong position in the evolving cryptocurrency market.
Growing Trend of Capital Raising in Crypto Firms
Coinbase’s move to raise capital through convertible notes is part of a growing trend in the crypto industry. More crypto companies are turning to traditional financial instruments like convertible notes to raise capital from institutional investors. This allows them to tap into traditional market funds while maintaining their focus on the crypto space.
Similar strategies have been adopted by other firms, such as MicroStrategy and Grayscale. MicroStrategy, for instance, has used its public stock offerings to raise funds for Bitcoin acquisitions. Grayscale, a prominent crypto asset management firm, has also filed for an IPO to raise capital for its operations.
The rise of these hybrid financial strategies signifies the ongoing convergence of traditional finance and the cryptocurrency market. It also reflects the increasing acceptance of digital assets by institutional investors.
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