Analyst Summary
- Super Micro Computer, Inc. closed a $700 million offering of 2.25% Convertible Senior Notes due 2028.
- The company intends to use the proceeds for general corporate purposes, including funding working capital for growth and business expansion.
- The company amended and supplemented the indenture for its 2029 Convertible Senior Notes, including changes to interest rate and conversion rate.
- The initial conversion rate of the New Convertible Notes is 16.3784 shares per $1,000 principal amount, equivalent to a conversion price of $61.06 per share.
- The Amended 2029 Notes will bear interest at an annual rate of 3.50%, payable semi-annually.
- The initial conversion rate of the Amended 2029 Notes is 11.9842 shares per $1,000 principal amount, equivalent to a conversion price of $83.44 per share.
Potential Implications
Stock Price
- The issuance of new shares upon conversion of the notes could dilute existing shareholders.
- The conversion price of the new notes and amended notes could act as a ceiling or floor for the stock price.