Coinbase plans $1B bond sale

Mar 13, 2024
The California-based crypto exchange plans to raise $1B through the placement of convertible debentures, following the path of Michael Saylor's MicroStrategy.

On Tuesday, Coinbase announced a plan to capitalize on the recent growth of digital assets through the sale of convertible bonds. The proceeds from the transaction are planned to be used to repay debt obligations, pay for potential transactions with a limited limit and, possibly, to acquire other companies.

The decision to sell the bonds followed a large-scale increase in the Bitcoin exchange rate to a record level of more than $73K. The largest cryptocurrency gained 67% in value, while Coinbase shares increased by 48% over the same period.

Representatives of Coinbase also announced that they will offer convertible bonds through a private placement. Convertible bonds can be converted into shares of the issuing company or into cash at a certain point. The year 2030 is named as the likely moment of conversion.

Thus, Coinbase follows the MicroStrategy strategy. Recall that Sailor’s company acquired 205,000 BTC, the value of which today is more than $15B. In March alone, MicroStrategy increased the size of its convertible debt from $600M to $700M to purchase BTC.

Coinbase is taking additional steps to reduce the blurring when converting its debt into equity by offering negotiated transactions with a limited limit. In fact, this is a hedge to prevent blurring during the conversion of banknotes. This provision was not included in the latest MicroStrategy deal.

Statement on the sale of Coinbase assets worth $1B. It happened after some Wall Street analysts abandoned their bearish stance on stocks. Raymond James and Goldman Sachs are the bears who raised the stock’s rating, citing a massive rally in the digital asset markets.

Public companies often take advantage of the bull market by raising money by selling new securities such as stocks, convertible bonds, etc.