Coinbase announces offering of $1B in convertible notes

Coinbase announced a proposed offering of $1 billion in convertible notes on Tuesday.

The notes would mature in 2030, according to the company, and would be offered to institutional investors. 

“Coinbase also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $150 million principal amount of notes solely to cover over-allotments,” the company said. The company will elect to convert the notes into cash, shares of Class A stock or a combination. 

The crypto exchange will use the proceeds from the offering for “general corporate purposes” and will also use the funds to pay or repurchase 0.50% convertible senior notes due 2026, 3.375% senior notes due in 2028 and 3.625% senior notes due in 2031. 

Read more: Coinbase moves forward with appeal of SEC’s rulemaking petition denial 

“Coinbase may also use a portion of the net proceeds to make investments in and acquisitions of other companies, products or technologies that Coinbase may identify from time to time,” the press release added.

The stock was down around 2.5% after hours to $249 a share or roughly $22 from its 52-week high. 

Coinbase is up 308% in the past year, and up 82% in the past month alone.

The move follows a similar one from MicroStrategy earlier this month. 

The company, co-founded by Michael Saylor, announced a $600 million private offering of convertible senior notes. Just days later, it upped the offering to $700 million. It plans to use the proceeds for corporate purposes and will also use the funds to buy more bitcoin.

The stocks of both Coinbase and MicroStrategy were boosted not only by the record-breaking bitcoin ETFs but also buoyed by bitcoin, which has carved out new all-time highs multiple times over the past week. 

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