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Coinbase Plans $2 Billion Raise Through Convertible Notes
Coinbase is looking to bring in some fresh cash—$2 billion, to be exact. The exchange announced Tuesday it’s offering convertible senior notes in a private sale, targeting institutional buyers. The money, as these things usually go, is earmarked for “general corporate purposes.” That’s corporate-speak for anything from day-to-day operations to snapping up other companies or tech.
The notes come in two flavors: $1 billion due in 2029 and another $1 billion due in 2032. Buyers can eventually convert them into cash, Coinbase stock, or a mix of both. It’s not the first time the company’s gone this route—last March, it raised $1 billion the same way, with similar language about potential acquisitions. And sure enough, not long after, it moved to buy crypto exchange Deribit in a deal worth nearly $3 billion.
Stock Slump and Regulatory Headwinds
The timing’s interesting, though. Coinbase’s stock closed Monday at $314.69, down about 25% from its peak last month. Pre-market trading saw it dip another 2% after the announcement. The company went public in 2021, and shares hit an all-time high of $419.78 in March as Bitcoin rallied. But the good vibes didn’t last.
A week after that peak, UK regulators slapped Coinbase with a $4.5 million fine for allegedly failing to properly vet high-risk customers. Then came last week’s earnings report, which showed revenue dropping 25% from the previous quarter. The stock tanked 17% the next day. Some of that decline might be tied to fallout from a major data breach in May, though the company did see a boost from its stake in Circle, the stablecoin issuer that went public in June.
What’s Next for Coinbase?
So, why raise $2 billion now? It’s hard to say for sure. Maybe they’re bracing for more turbulence, or maybe they’ve got another acquisition in the works. The wording in the announcement is deliberately vague—standard practice, but it leaves room for speculation.
One thing’s clear: Coinbase isn’t slowing down, even with the recent setbacks. Whether this move pays off depends on what they do with the cash. Acquisitions can be risky, but they’ve worked before—Deribit was a big get. Then again, the crypto market’s been unpredictable lately, and regulators aren’t making things easier.
For now, all we know is that institutional buyers will have a chance to bet on Coinbase’s future. Whether that’s a smart bet? Well, that’s another question entirely.