Coinbase Prices Upsized $2.6 Billion Convertible Senior Notes Offering

08/05/2025 – 11:03 PM

Remote-First-Company/BOSTON–(BUSINESS WIRE)–
Coinbase Global, Inc. (Nasdaq: COIN) is making waves in the capital markets. The crypto exchange titan announced late Tuesday the pricing of a significant convertible note offering, exceeding initial expectations and signaling robust investor appetite.
Coinbase secured $1.3 billion each in 0% Convertible Senior Notes due in 2029 and 2032, respectively, through a private placement under Rule 144A. Interestingly, the total principal amount was bumped up from a previously announced $2.0 billion. But that’s not all, the initial purchasers were also granted options to buy an additional $200 million in principal for each series of notes, giving them opportunity to add to their allocation.

The offering is expected to close on August 8, 2025, after customary conditions are met. Coinbase projects net proceeds of approximately $2.56 billion, and a potential surge to $2.96 billion if underwriters fully exercise their options. This cash infusion positions the company for strategic maneuvers in the evolving crypto landscape.

So, where’s all that money going? Approximately $194.4 million is earmarked to cover the expenses of capped call transactions associated with each series of notes. These sophisticated financial instruments are designed to mitigate potential dilution from future conversions and offset potential cash payouts above the principal amount.
The flexibility embedded in the use of proceeds has investors paying attention. Coinbase plans to use the remaining funds for general corporate purposes which might include, but are not limited to initiatives such as working capital, capital expenditures, strategic investments, and acquisitions of innovative companies. The firm also leaves the door open to potentially repurchasing shares of its Class A common stock or redeeming outstanding senior notes which would be a move to optimize its capital structure.

The notes themselves are senior, unsecured obligations, bearing no regular interest and accruing no principal. The 2029 notes mature on October 1, 2029, while the 2032 notes mature on October 1, 2032, unless repurchased, converted, or, in the latter case, redeemed earlier. Notably, Coinbase has the option to redeem the 2032 notes starting October 1, 2029, contingent on its Class A common stock trading above 130% of the then-effective conversion price.

Speaking of conversions, the initial conversion rate for the 2029 notes is set at 2.2005 shares per $1,000 principal amount, translating to a conversion price of roughly $454.44 per share – a 52.5% premium over Coinbase’s August 5, 2025 closing price of $297.99. The 2032 notes boast a conversion rate of 2.5327 shares per $1,000, implying a conversion price of approximately $394.84 – a 32.5% premium.

However, conversion rights are initially subject to specific conditions until July 2, 2029 (for the 2029 notes) and July 1, 2032 (for the 2032 notes). After those dates conversions become less restrictive potentially opening the floodgates. Settlements will be at Coinbase’s discretion, using cash, shares, or a combination.

Coinbase strategically entered into capped call transactions with the initial purchasers and other financial institutions. Capped call transactions are expected to reduce the potential impact of any conversion of either series of notes which is being driven by concern for dilution in the future. The cap price for both tranches is currently $595.98 and is subject to adjustments under the agreement. This all equates to a roughly 100% premium over the Class A common stock closing price of the company on August 5, 2025.

Market observers should watch for hedging activities by the option counterparties, which could influence Coinbase’s stock price. As it is customary for these types of transactions, hedging, unwinding and derivative activities by the counterparties could add volatility to the stock both in the short and long term.
It’s important to note that these notes and any potential shares are being offered privately to qualified institutional buyers and haven’t been registered under the Securities Act. This means they can’t be offered or sold in the United States without proper registration or exemption.

About Coinbase

Coinbase (Nasdaq: COIN) champions economic freedom through cryptocurrency, striving to onboard over a billion users. The platform facilitates crypto engagement, from trading to staking, while advocating for responsible regulation.

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements regarding the offering, capped call transactions, and use of proceeds. These statements are subject to risks and uncertainties, including market conditions and potential changes to the use of proceeds. Refer to Coinbase’s SEC filings for comprehensive risk factors. Coinbase disclaims any obligation to update these statements.

Source: Coinbase Global, Inc.