This week, Coinbase announced its intention to issue $1 billion in convertible bonds, following the example of MicroStrategy’s announcement a few weeks ago. What will this cash be used for?
Coinbase intends to raise $1 billion in bonds
On Tuesday, cryptocurrency platform Coinbase unveiled plans to issue $1 billion in bonds. These are intended for institutional investors, who will also have a 30-day period to purchase up to $150 million of additional bonds.
Maturing on April 1, 2030, these “senior unsecured bonds” will be convertible into Coinbase Class A shares, not unlike MicroStrategy’s recent announcement, the company having recently presented similar plans for $600 million.
This cash could be used to redeem other bonds, for working capital or for investments:
“Coinbase may also use a portion of the net proceeds to make investments and acquisitions in other companies, products or technologies that Coinbase may identify from time to time. “
At the same time, Coinbase shares have benefited greatly from the market’s recovery, and have done so for several months now. From a low of $31.55 on January 1, 2023, the stock has since gained over 700%, now trading at $256:
Coinbase share price in weekly chart
This brings the company’s capitalization to just over $62.06 billion. Last month, Coinbase announced a 41% increase in quarterly sales, and it will be interesting to see what happens next month with the current quarter.
