The famous America-based cryptocurrency exchange Coinbase revealed its plans to raise as much as $1.25 billion. It aims to collect the funds from institutional buyers through a proposed private offering.
According to Monday’s statement, the offerings would be available for those firms which manage more than $100 million in securities of other companies.
Not only that, the statement also revealed that the offerings would be in senior convertible notes, which will be due in 2026. Such notes entitle the holder to a flurry of interest payments. The Nasdaq listed crypto-exchange further described its conditions, saying,
Coinbase also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $187.5 million principal number of notes solely to cover over-allotments. The notes will be senior, unsecured obligations of Coinbase, will accrue interest payable semi-annually in arrears and will mature on June 1, 2026, unless earlier repurchased, redeemed or converted. The notes will be convertible into cash, shares of Coinbase’s Class A common stock, or a combination thereof, at Coinbase’s election.
In addition to that, it was also suggested that the initial conversion and interest will be determined as per the price of the offerings. On the other hand, following the announcement, the exchange’s shares have performed poorly in the market. After the thirty-five percent decrease in the value of BTC, the exchange’s shares dropped to $245 per share.
The poor performance of the Coinbase stocks comes despite its outstanding performance in the first quarter of this year. The report was made public just a week before its listing on Nasdaq, with the revenue hitting $1.8 billion and trading volume up by nearly 276 percent.
At the same time, crypto experts suggest that the company’s stock might hit the $100 mark and is unlikely to meet future profit expectations.