Popular centralized exchange Coinbase announced on Tuesday its intention to raise $2 billion via convertible senior notes in a private offering. The funds will be used for “general corporate purposes,” which it says may include “acquisitions of other companies, products, or technologies.”
The company’s publicly traded stock closed on Monday at $314.69, per Trading View, down 25% from its all-time high. COIN has since slumped almost 2% in pre-market trading to $308.54.
Coinbase’s sale will be open to “qualified institutional buyers” to purchase $1 billion worth of convertible senior notes that mature in 2029, as well as another $1 billion of notes maturing in 2032. These notes can be converted into cash, shares of Coinbase’s Class A Common stock, or a combination of both.
After paying the necessary expenses associated with the sale, the announcement says Coinbase will use the proceeds for “general corporate purposes, “which may include “working capital, capital expenditures, and investments in and acquisitions of other companies, products, or technologies.”
Coinbase similarly announced its plan to raise $1 billion via convertible notes in March of last year, which also outlined that it may use the funds for acquisitions. Since then, Coinbase has announced that it will acquire crypto exchange Deribit for approximately $2.9 billion—made up of $700 million in cash and 11 million shares of Coinbase Class A common stock
The company went public in 2021, with shares hitting a record high of $419.78 last month as Bitcoin surged. However, just a week later, the firm was hit with a $4.5 million fine by a UK regulator for allowing “high-risk customers” to purchase crypto.
On Thursday, Coinbase revealed that its revenue had dropped 25% from the previous financial quarter. The exchange faced financial fallout following its major data breach in May, but also noticed some upside from its investment in stablecoin issuer Circle—which surged following its June listing. The day after the disappointing earnings call, COIN dropped 17%.