BUZZ-DigitalOcean down after debt-for-stock swap deal
DOCN•Shares fall after refinancing move
Cloud computing platform DigitalOcean's DOCN.N shares were down 3% to $116.03 premarket on Thursday after the company refinanced some debt.
DOCN announced a registered direct offering of about 12.5 million shares at $117.54, according to an SEC filing.
Proceeds to fund note repurchase and AI cloud expansion
The company intends to use net proceeds of approximately $1.47 billion, along with cash, to repurchase about $471.83 million principal of its outstanding $625 million 0% convertible notes due 2030 in privately negotiated transactions with some holders of the notes.
The offering price of $117.54 equals the VWAP of DOCN's stock on Wednesday, according to the filing. The stock finished down 5.3% at $119.65 in the prior session.
Broomfield, Colorado-based DOCN early Wednesday unveiled the transaction, which it said was expected to reduce net leverage with minimal change in cash or shares outstanding, adding that it creates capacity to expand its AI-Native Cloud.
At Wednesday's close, the stock was up about 149% year to date, giving the company a market cap of about $12.5 billion.
The average rating of 16 analysts is "buy"; the median price target is $178, according to LSEG data.
