Coinbase announces $1.25 Billion Convertible Note offering and Stock falls to an all-time low

Coinbase Advertisement Times Square From: The Coinbase Blog

Coinbase’s stock price hit its lowest point on Monday after going public in April. Coinbase’s stock price fell as much as 8% on Monday as a sell-off in Bitcoin and other cryptocurrencies contributed to the drop of the stock. Coinbase announced a $1.25 billion convertible debt offering for notes that will be due in 2026.

This news had many investors surprised as no news about this offering was previously discussed. Coinbase noted that people who initially purchased their notes will have a 30-day option to purchase up to an additional $187.5 million in their principal amount. This was all done because Coinbase believes that this new funding represents an opportunity for them to improve their balance sheet with low-cost capital.

Coinbase shares fell to a low of $238.25 which made it the first time since Coinbase went public for the stock to drop below $250 a share. Coinbase has had a large pullback since their IPO date where their stock price surged to over $420 a share and since then the stock has been on a sharp decline.

On Monday Bitcoin fell below $43,000 after Elon Musk made comments that Tesla would be selling off a portion of their Bitcoin holding because it appeared to be harmful to the environment. This however is not the end of Bitcoin but due to rising concerns about mining and the impact on the Environment the cryptocurrency has been on a sharp decline falling more than 23% in the past week. However, it was not only Bitcoin that suffered but many other cryptocurrencies fell including a 16% decline in Ethereum in the past week as well as Cardano-ADA falling 10%, and Dogecoin down about another 4%.

The total value of the global cryptocurrency market lost approximately 23% over the past five days leading to a scare of crypto investors which caused a large sell off in the global crypto market.

This past week Coinbase reported their earnings and recorded a total sales of $1.8 billion, which was in line with the company’s expectations for April. This is however a little below the $1.81 billion in sales that Bloomberg analysts expected. Coinbase did however report a net income of $771 million, which was within the expected range of $730 million to $800 million that the company was expecting, and this is great news for the company considering analysts only expected $762.6 million of net income.

With all of the ups and downs in both the stock markets and the crypto markets over the past few months this may be a confusing time for institutional investors. It cannot be said for sure what the future of Coinbase stock will be or how the cryptocurrency market will react in the future. What does this mean for the future of Coinbase stock? Will Coinbase continue to be the top cryptocurrency brokerage or will they be beat out by competition?

Stay tuned to find out! Follow Emerald Investment Analysts to stay up to date on all your financial news, and let us know what you think down in the comments!

Written by: Aneeshan Balakaran

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