Snowflake Stock Is Falling Tuesday: What's Going On?

Snowflake Inc SNOW shares are trading lower Tuesday after the company announced a private placement of convertible senior notes.

What Happened: After the market close on Monday, Snowflake announced that it intends to offer $1 billion worth of convertible senior notes due 2027 and $1 billion worth of convertible senior notes due 2029 in a private placement to institutional investors.

Snowflake said it expects to grant the initial purchasers the option to purchase up to an additional $150 million worth of each of the convertible notes.

The company expects to use the net proceeds from the offering to pay the cost of capped call transactions, to repurchase up to $575 million of its common stock from purchasers of the notes in privately negotiated transactions and for general corporate purposes.

Snowflake had approximately $1.28 billion in cash and cash equivalents at the end of the second quarter.

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How To Buy SNOW Stock

By now you're likely curious about how to participate in the market for Snowflake – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. In the case of Snowflake, which is trading at $113.26 as of publishing time, $100 would buy you 0.88 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

SNOW Price Action: Snowflake has a 52-week high of $237.72 and a 52-week low of $107.13, according to Benzinga Pro. At the time of publication, Snowflake shares were down 0.82% at $112.33.

Photo: courtesy of Snowflake.