Robinhood Markets Inc. (NASDAQ:HOOD) shares are trading lower Monday after the company announced a $2.0 billion convertible senior notes offering due 2029.
- Robinhood Markets stock is under selling pressure. What’s pulling HOOD shares down?
The Offering
Robinhood announced it intends to offer $2.0 billion in aggregate principal amount of convertible senior notes due October 1, 2029, in a private placement to qualified institutional buyers under Rule 144A. The initial purchasers have been granted an option to purchase up to an additional $200 million in notes, bringing the potential total to $2.2 billion.
The interest rate, initial conversion rate, and certain other terms will be determined at pricing. Robinhood may not redeem the notes prior to July 1, 2028, except under certain limited circumstances.
Use of Proceeds
Robinhood plans to use approximately $300 million of the net proceeds to repurchase its Class A common stock. A portion of the proceeds will also fund capped call transactions, designed to reduce potential dilution to existing shareholders upon conversion. Any remaining proceeds will be used for general corporate purposes, which may include organic growth investments, potential acquisitions, and capital expenditures. Following the offering, Robinhood also plans to continue repurchasing additional shares under its existing stock repurchase program.
Robinhood Stock Tumbles
HOOD Price Action: At the time of publication, Robinhood shares are trading 1.92% lower at $106.07, according to data from Benzinga Pro.
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