- The total volume of obligations of the exchange on bonds is $1.37 billion
- Coinbase said the measure reflects management’s confidence in the firm’s stability.
Yesterday, June 15th, cryptocurrency exchange Coinbase announced that it had bought $64.5 million worth of convertible bonds at a 29% discount. These bonds mature in 2026.
The company expects the buyback to end on June 20. Thereafter, Coinbase’s total bond commitments will be $1.37 billion.
“We are always looking for the best ways to allocate capital and maximize shareholder value. This opportunistic buyout should be seen as a continuation of these efforts. It reflects confidence in our business, strong Q1 2023 financials and improved competitive position.” — emphasized CFO Alesya Haas.
But what does this mean in practice?
Convertible bonds are bonds that entitle the investor to a share of the shares of the issuing company. By buying them out, Coinbase seems to want to give depositors confidence in the financial stability of the exchange.
Recall that last Tuesday, June 6, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase. After that, the company’s stock prices fell, and significantly.
At the time of writing, they are trading at $54.25 with a slight loss on a weekly basis. At the same time, there is an uptrend in the market.
The news that the company is redeeming bonds ahead of schedule is likely to “warm up” the rate a little more. Moreover, the process with the SEC can drag on for months, if not years.