Coinbase’s recent bond buyback offer worth $150 million has received limited interest from investors, indicating potential upside for the notes. The cryptocurrency exchange announced on Monday that it had increased its repurchase offer to 67.5 cents on the dollar, but only $50 million worth of bonds have been tendered so far.
The bonds, which carry a 3.625% coupon and mature in 2031, are currently trading at around 63.5 cents on the dollar. Bondholders still have until September 1 to make their final decision regarding the offer. This hesitation from investors suggests they believe there may be more value to be gained from holding onto the notes.
Despite facing regulatory concerns, Coinbase’s recent earnings report surpassed analysts’ expectations. Although the company’s shares have declined by nearly 29% in the past month, they remain up by over 100% since the beginning of the year.
Coinbase’s offer to partially buy back $1 billion in bonds was initially announced earlier this month when the bond’s value dipped below 60 cents on the dollar. However, Moody’s, the ratings agency, lowered its outlook on the company to negative following a lawsuit filed against Coinbase by the Securities and Exchange Commission in June.
The limited interest in Coinbase’s bond buyback offer highlights the uncertainty among investors. While the company continues to deal with regulatory challenges, its recent financial performance has shown strength. As the decision deadline approaches, it remains to be seen whether more bondholders will take advantage of the repurchase offer or hold onto their notes in anticipation of future gains.
