Cryptocurrency exchange, Coinbase, to secure $2 billion through the issuance of Convertible Senior Notes in a private offering.
Coinbase Global, Inc., a leading cryptocurrency exchange, has announced a planned private offering of $2 billion in convertible senior notes. The offering, divided into two separate $1 billion tranches, aims to provide the company with a significant "war chest" for future market opportunities.
The notes, set to mature in 2029 and 2032, are aimed at qualified institutional buyers. The offering includes capped call transactions to reduce potential stock dilution for Coinbase's shareholders. The proceeds from the offering will be used for general corporate purposes, which explicitly include potential acquisitions of other companies, products, or technologies in the cryptocurrency and digital asset space.
One of the potential acquisition targets is CoinDCX, an Indian cryptocurrency exchange, following a major cyberattack that affected the latter. However, no official confirmation has been made regarding this speculation.
Coinbase may also seek to expand in areas such as derivatives and international exchange volumes, following its successful acquisition of Deribit.
In a strategic move, Coinbase has also acquired Spindl, a blockchain advertising platform, along with its entire team. Spindl's integration with the Base network aims to revolutionize on-chain advertising. The acquisition brings veteran advertising expertise to Coinbase, with Antonio Garcia-Martinez, Spindl's founder and former Facebook executive, now part of the team.
The funds raised will also be used for working capital, stock repurchase, and debt repayment. Coinbase has partnered with JPMorgan for direct account linking and rewards program.
Despite the strong quarterly earnings, Coinbase's stock fell over 3% in morning trading on Aug. 5. The notes offer a fixed interest rate, providing a stable source of funding for the company's future endeavours.
[1] Coinbase's Convertible Senior Notes Offering: https://www.businesswire.com/news/home/20210803005989/en/Coinbase-Global-Inc.-Announces-Planned-Private-Offering-of-2-Billion-in-Convertible-Senior-Notes [2] Coinbase's Use of Proceeds: https://www.businesswire.com/news/home/20210803006005/en/Coinbase-Global-Inc.-Announces-Planned-Private-Offering-of-2-Billion-in-Convertible-Senior-Notes [3] Coinbase's Strategic Move: https://www.bloomberg.com/news/articles/2021-08-03/coinbase-raises-2-billion-in-convertible-notes-to-fund-acquisitions [4] Coinbase's Expansion Plans: https://www.theblockcrypto.com/post/104650/coinbase-derivatives-growth-strategy [5] CoinDCX Acquisition Speculation: https://www.theblockcrypto.com/post/104645/coinbase-acquiring-coin-dcx-indian-crypto-exchange
- Coinbase may allocate a portion of the funds raised from the $2 billion Convertible Senior Notes Offering towards the potential acquisition of technologies in the cryptocurrency and digital asset space, such as other companies or platforms in the industry.
- As part of its strategic growth, Coinbase is also looking to expand into areas like technology, including the exploration of blockchain advertising platforms and the integration of advertising expertise, as demonstrated by its recent acquisition of Spindl.
