Snap takes advantage of recent stock surge to sell convertible debt

By Tomi Kilgore

Snapchat parent proposes an offering of $650 million in debt that can be converted into cash or stock

Shares of Snap Inc. pulled back Wednesday after the parent of the video-messaging app Snapchat said it planned to take advantage of the recent runup in its stock price to sell convertible debt.

The company (SNAP) said it was proposing a private offering of $650 million in convertible senior notes due 2030. The notes will be convertible to cash or shares of Snap common stock, or a combination of the two.

The interest rate and conversion rate of the debt have not yet been determined.

The stock dropped 2.2% in morning trading, to pull back from Tuesday's three-month closing high.

The announcement of the proposed offering comes after the stock rocketed 50.4% through Tuesday following the company's second-quarter results, which were reported after the April 25 close.

Snap said it plans to use the proceeds from the offering to buy back some outstanding convertible notes, due 2025 and 2026, and for general corporate purposes.

Snap had $3.32 billion in principal in convertible debt as of March 31, including $184.1 million in 2025 notes and $487.3 million in 2026 notes.

The stock has soared 99% over the past 12 months, while the S&P 500 has gained 25.2%.

-Tomi Kilgore

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05-08-24 1034ET

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