Issuers use these hedges with convertible debt to prevent dilution to existing shareholders, even when their share price rises above the conversion price, though they have to pay a fee. During its breakneck rally, fitness company Peloton famously raised $1 billion in convertible debts in 2021, including a capped call option. “The capped call transactions will cover, subject to customary adjustments, the number of shares of Coinbase’s Class A common stock that will initially underlie the notes,” Coinbase said.
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- Source: https://www.coindesk.com/business/2024/03/12/coinbase-plans-1b-bond-sale-that-avoids-hurting-stock-investors-copying-michael-saylors-successful-bitcoin-playbook/?utm_medium=referral&utm_source=rss&utm_campaign=headlines
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