RJF - Crypto Exchange Coinbase Plans $1 Billion Bond Sale
2024-03-13 12:37:02 ET
Publicly traded %Cryptocurrency exchange %Coinbase (NASDAQ: COIN) plans to raise $1 billion U.S. through selling %ConvertibleBonds .
The company said it is looking to capitalize on the continued rally in crypto to raise funds. However, the company is focusing on bonds and avoiding an equity sale that could hurt its shareholders and stock price.
Coinbase is following a similar playbook to %MicroStrategy (NASDAQ: MSTR), which recently raised $700 million U.S. through convertible bonds to buy more %Bitcoin (CRYPTO: ).
Coinbase said it will offer unsecured convertible senior notes via a private offering. Convertible bonds can be turned into shares of the issuing company or cash at a later date.
The bonds Coinbase is offering have a conversion date of 2030.
If Coinbase had chosen to raise money by selling new shares, that would dilute the ownership of existing shareholders and likely send its stock price lower.
Coinbase is seeking to raise capital amidst a big rally in Bitcoin and smaller cryptocurrencies. The price of Bitcoin is currently at an all-time high above $73,000 U.S.
The world’s largest cryptocurrency exchange, Coinbase said it plans to use proceeds from its bond sale to repay debt and potentially acquire other companies.
The stock of Coinbase has increased nearly 70% this year and is up 350% over the past 12 months at $265.66 U.S. per share.
Analysts at %RaymondJames (NYSE: RJF) and %GoldmanSachs (NYSE: GS) recently upgraded their ratings on Coinbase’s stock.