Updated: March 12, 2024, 6:56 PM EDT
Seizing the opportunity to raise debt as its stock price near 26-month highs amid a rally in cryptocurrencies, Coinbase on Tuesday announced plans to sell $1 billion in bonds to institutional investors.
The largest cryptocurrency exchange in the U.S. by daily trading volume is offering convertible bonds to institutional investors. The move is aimed at repaying existing debt and boosting cash to cover corporate costs. The sale of the bonds, which mature in 2030, could increase the company's debt by up to $1 billion, bringing its debt to $4 billion.
Upon maturity, the note can be exchanged for Coinbase Class A stock, cash, or a combination of the two redemption forms. Investors may be able to purchase an additional $150 million worth of notes within their first 30 days after the sale.
Coinbase shares fell about 2% in after-hours trading after the announcement, after rising 0.78% during regular trading hours, according to Yahoo Finance data.
Nevertheless, the exchange's stock price has continued to rise more than 40% over the past year amid a strong rally in crypto prices sparked by federal regulatory approval for a range of Bitcoin-based investment products. There is. Coinbase currently has a market capitalization of $61.58 billion and had $5.4 billion in cash on hand at the end of last year, according to the company's financial statements.
However, the exchange is still recovering from an ongoing legal battle with regulators in federal court and the market collapse that sent crypto prices plummeting after FTX's collapse in November 2022. Coinbase's revenue was $3.1 billion last year, down from the roughly $7.8 billion it earned during the last crypto bull market in 2021.
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