Coinbase Stock Is Falling After $2 Billion Debt Offering

The company intends to offer $1 billion in convertible senior notes due in 2029 and $1 billion due in 2032. (Michael Nagle/Bloomberg)

Shares of Coinbase Global were slumping Tuesday after the cryptocurrency exchange announced a convertible note offering worth up to $2.3 billion.

The company intends to offer $1 billion in convertible senior notes due in 2029, and plans to offer $1 billion due in 2032 in a private offering. Coinbase also expects to grant options to purchase up to an additional $150 million of each set of notes.

The interest rate, initial conversion rate, and other terms will be determined upon the offering’s pricing, the company said.

Coinbase stock was falling 5.4% on Tuesday. Shares have jumped 21% this year, but gave back some gains last week after a disappointing earnings print.

As part of the debt offering, Coinbase expects to enter into capped call transactions with purchasers, which are “expected generally to reduce the potential dilution to Coinbase’s Class A common stock upon any conversion of the relevant series of notes,” the company said.

Coinbase said it intends to use some of the proceeds to pay the cost of the capped call transactions. It will use remainder “for general corporate purposes,” which could include capital expenditures, working capital, acquisitions, or share repurchases.

Write to Nate Wolf at nate.wolf@barrons.com