Coinbase plans to raise $1 billion through a bond offering amid bullish market trends.
Coinbase announced plans to issue $1 billion in bonds to fund growth and expansion, according to a March 12 filing.
The notes, designated as unsecured convertible senior notes, are scheduled to mature in 2030, giving investors the option to convert their holdings into Coinbase stock or cash. The offering also includes a 30-day option to purchase an additional $150 million of principal to cover over-allotments.
This strategy is considered a smart strategy to capitalize on the positive momentum in the cryptocurrency market while protecting shareholder value.
Coinbase also introduced “negotiable cap currency trading” as part of its bond issuance. The legislation is designed to mitigate the dilutive effect on shareholders when debt is converted to equity.
Proceeds from the bond offering will be earmarked for a variety of purposes, including debt repayment, financing capped currency trading, and potential acquisitions, signaling Coinbase’s ambitious plans for growth and integration within the cryptocurrency economy.
Coinbase stock price surges due to cryptocurrency
This announcement comes on the heels of a surge in the value of Bitcoin, which recently hit an all-time high, surpassing $73,000.
The bullish trend in the cryptocurrency market is paralleled by the Coinbase stock price rising 48% this year to the last level in December 2021. That prompted some Wall Street analysts to revise their previously cautious outlook on the company’s stock.
Financial giants such as Raymond James and Goldman Sachs have shifted from bearish to more optimistic outlooks thanks to the sector’s strong performance.
As of press time, COIN is trading at $.256.14; It rose 11.91% compared to last week and 82.45% compared to the previous month.
Coinbase previously offered $1.25 billion of senior convertible notes in May 2021, but this came after the market crash associated with the collapse of the TerraUSD stablecoin. The company regularly repurchased outstanding debt.
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