Penguin Solutions falls after $650 mln convertible bond sale
PENG•Shares fall after capital raise
AI data center infrastructure provider Penguin Solutions' PENG.O shares down 7.7% to $71.80 after clinching capital raise
PENG late Tues announced pricing private offering of $650 mln 0% convertible bonds (CBs) due Aug. 1, 2031
Initial conversion price of $116.70 represents 50% premium to stock's last close of $77.80
Use of proceeds and market context
Co intends to use approx $298.1 mln of net offering proceeds to repurchase its 2% CBs due 2029 and 2% CBs due 2030, $100 mln to repay credit agreement, remainder for general purposes
It also expects to use approx $42.6 mln to fund capped call transactions to offset potential dilution
Fremont, California-based PENG has about $3.7 bln current market cap
Stock now up 170% over the past three months and hit record intraday high of $89.86 last Thurs
7 of 8 analysts rate the stock "strong buy" or "buy", 1 "hold"; median PT $77.50, per LSEG data
