CEFIFINANCE

Coinbase issues $1 billion convertible bond, stock price rises as Ark continues to sell and rebalance

share
Coinbase issues $1 billion convertible bond, stock price rises as Ark continues to sell and rebalance

The long-established U.S. cryptocurrency exchange Coinbase is currently selling $1 billion in convertible senior notes to institutional investors to offset previous debts and operational costs. The price of COIN has surged along with Bitcoin this year, reaching a 26-month high, prompting Ark Investment's funds, which have been supporting it all along, to continuously sell and rebalance.

Coinbase Plans to Issue $1 Billion in Convertible Notes

Following a surge in cryptocurrency prices, Coinbase's stock has reached a nearly 26-month high. In line with MicroStrategy's move, Coinbase has announced its plan to sell $1 billion in convertible senior notes to institutional investors. The details are as follows:

  • Due on April 1, 2030
  • Interest payable semi-annually
  • Convertible into cash, Coinbase Class A common stock, or a combination thereof
  • The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing

Coinbase intends to use the net proceeds from this offering to repay at maturity, or prior to maturity, from time to time repurchase or redeem its outstanding 0.50% convertible senior notes due 2026, 3.375% senior notes due 2028, 3.625% senior notes due 2031, and for general corporate purposes, including working capital and capital expenditures.

What is the principle behind MicroStrategy issuing convertible bonds with low interest rates and high stock conversion prices?

COIN Stock Continues to Rise, Ark Sells for Rebalancing

As a well-established U.S. cryptocurrency exchange and custodian for multiple Bitcoin spot ETFs, Coinbase's stock has regained its momentum with the rise in Bitcoin prices, reaching a 26-month high and closing at $256 yesterday.

Meanwhile, Ark Invest's funds, which have been supporting Coinbase, have been continuously selling off to rebalance as Coinbase's stock price keeps rising. Nevertheless, Coinbase still holds the top position in ARK Invest's flagship fund ARKK, with a weightage of 10.91%.

The art of rebalancing: Ark Invest continues to sell Coinbase and buy Block