Coinbase Global (COIN) was tumbling Wednesday after the pricing of $1.25 billion of convertible senior notes, which will pay interest of 0.5%, and a sharp drop in Bitcoin and other cryptocurrencies.
Shares of the Wilmington, Del., company were sliding 5.7% to $225 in premarket trading.
The Nasdaq stock exchange had pinned a reference price of $250 a share on Coinbase last month ahead of the exchange's direct listing.
The announcement came as Bitcoin prices were tumbling, following a warning from the People's Bank of China over the use of virtual currencies in the world's second-largest economy.
In a post on the PBOC's official WeChat account, the central bank said digital currencies should not be used in either financial markets or the real economy as money, given that they are not "real currencies."
Bitcoin was recently down 14.1% to $38,631.
As for the notes, they will be convertible at an initial conversion rate that is equivalent to $370.45 a share, a 55% premium to Tuesday's closing price of $239. The notes will be convertible at the option of the noteholder on the business day immediately preceding Dec. 1, 2025.
Coinbase said that it intends to use the net proceeds from the offering for general corporate purposes, which may include working capital and capital expenditures, and to use about $78.4 million of the net proceeds to pay the cost of the capped call transactions.
The company said it may also use a portion of the net proceeds to make investments in and acquisitions of other companies, products or technologies that Coinbase may identify in the future.
If the initial purchasers exercise their option to purchase additional notes, Coinbase expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions.