Crypto Exchange Coinbase Raises Offer on Debt Buyback Program
Crypto exchange Coinbase has increased the offer on its $150 million debt buyback program following lower-than-expected demand. Since the program’s launch, investors have tendered just over $50 million of bonds, falling short of the $150 million target. As a result, Coinbase raised its offer on 3.625% Senior Notes due 2031 from 64.5 cents to 67.5 cents on the dollar. Holders of the notes who participated in the buyback program will receive the amended consideration for their accepted notes, along with accrued and unpaid interest.
Key Points:
- Coinbase’s $150 million debt buyback program has received only $50 million in bond tenders so far.
- The exchange has raised its offer on the 3.625% Senior Notes due 2031 from 64.5 cents to 67.5 cents on the dollar.
- The notes were issued in September 2021 and hit an all-time low of 47 cents on the dollar in December 2022.
- Coinbase stock has recovered 50% despite facing allegations of selling unregistered securities from the SEC.
- Cathie Wood, CEO of Ark Invest, sold $12 million worth of Coinbase stock last month.
In September 2021, Coinbase issued $1 billion worth of 3.625% Senior Notes due 2031, which dropped to a low of 47 cents on the dollar in December 2022. This decline was due to Coinbase CEO Brian Armstrong’s warning of a potential 50% decline in revenue amidst the crypto market downturn. However, the notes have since rebounded to around 64.5 cents on the dollar. Despite the ongoing SEC lawsuit, Coinbase stock has recovered 50%, although it recently experienced a decline. Additionally, Cathie Wood, CEO of Ark Invest, sold $12 million worth of Coinbase stock last month after making significant purchases throughout 2022.
Hot Take:
Coinbase’s decision to raise the offer on its debt buyback program reflects the lower-than-expected demand from investors. This development highlights the challenges the company is facing, including the ongoing SEC lawsuit and the volatility of the crypto market. While the rebound in Coinbase stock and recovery of the notes’ price show some positive signs, it remains to be seen how these factors will impact the company’s long-term performance.