Coinbase is turning to the bond market for support after a disappointing second-quarter earnings report triggered a steep sell-off in its stock.
Key Takeaways:
Coinbase is raising $2 billion through a private sale of convertible senior notes after a weak Q2 earnings report. The notes, maturing in 2029 and 2032, target institutional buyers under Rule 144A. Proceeds will fund capped call transactions and general corporate needs, including possible debt buybacks.The crypto exchange revealed Tuesday plans to raise $2 billion through a private offering of convertible senior notes, split equally between 2029 and 2032 maturities.
The move follows a 15% drop in COIN shares on August 4, after the company reported a quarter-over-quarter revenue dip and rising costs. Coinbase shares were trading down more than 2% on Tuesday morning at $318.
Coinbase Aims $2B Note Sale at Qualified Institutional Buyers
The $1 billion notes due in 2029 and another $1 billion due in 2032 will be offered to qualified institutional buyers under Rule 144A.
These senior unsecured notes will pay interest twice a year and can be converted into cash, Class A common stock, or a combination of both, at Coinbase’s discretion.
Redemption terms are standard, with the option for Coinbase to call the notes before maturity under certain conditions.
Initial purchasers may also be granted an option to buy up to an additional $300 million across both series, depending on market interest.
Final pricing and conversion details will be determined at the time of offering.
To limit share dilution in the event of conversion, Coinbase plans to enter into capped call transactions tied to each note series.
These instruments are designed to reduce the impact of stock issuance above a set price and could be hedged through trading activity in Coinbase shares and derivatives around the time of pricing and during the life of the bonds.
Proceeds will fund the capped call purchases and cover broader corporate needs, including working capital, capital expenditures, acquisitions, and debt repurchases.
The company highlighted a range of securities potentially in line for redemption, including its 0.50% convertible notes due 2026 and senior notes maturing between 2028 and 2031.
Coinbase’s announcement comes amid a broader trend of crypto companies turning to convertible bonds to gain liquidity while managing shareholder dilution.
Firms such as Strategy and Marathon Digital (MARA) have also turned to the convertibles market in recent months.
Coinbase Stock Slide Labeled a ‘Buy’ by Benchmark Analysts
Meanwhile, some analysts view the stock’s slide as an opportunity. Benchmark maintained its Buy rating despite what it called “soft” results, citing long-term upside.
Coinbase also continued its corporate Bitcoin accumulation. In Q2, the company purchased 2,509 BTC for approximately $222 million, lifting its total holdings to 11,776 BTC and placing it back among the top 10 public holders of the asset, just ahead of Tesla by coin count.
As reported, TIME has recognized Coinbase as one of 2025’s 100 Most Influential Companies, labeling the crypto exchange a “disruptor” for its significant role in shaping US digital asset policies and markets.
TIME noted the exchange as a key driver behind the industry’s policy efforts and predicted Coinbase could become the central hub for crypto trading in the US.
Beyond the US, Coinbase is broadening its reach in Europe, securing a license under the EU’s MiCA regulatory framework through Luxembourg’s financial regulator.
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